The popularity of Buy Here Pay Here (or BHPH for short) dealerships has been on the rise recently. Although the idea and concept behind it aren’t exactly new, the increasingly difficult economic situation makes it a great proposition for a lot of people. To put it simply, BHPH is a method of running an automobile dealership where the dealership itself extends credit to purchasers of vehicles. They transcend the boundaries and limits of what one would categorize as a ‘standard dealership’ and evolve into something much, much more.
Although it may sound somewhat intimidating at first, we can assure you, it is anything but. In fact, the entire concept was originally conceived to help the average customer acquire affordable means of transportation at conditions which suit him the most. At its very core, the BHPH system caters to the customer and his needs. At this point you’re probably already questioning its validity and the benefits, so allow us to break down the entire process and explain how it all works.
A Bit of History
BHPH originated in the early 1970s when the U.S. experienced a savings and loan crisis. Dealers still needed to move cars and people wanted affordable cars to be able to get on with their everyday lives. In a time when banks would not give out loans to a lot of good, reputable citizens, dealerships saw the opportunity to start lending out loans themselves and grabbed the opportunity. The 2008 financial crisis relaunched the BHPH concept and it’s been proven to work. With that out of the way, let’s get into why it makes sense and you should consider it before leasing or taking out a loan from the bank.
Extremely Fast Service
This one is pretty obvious, but it’s still well worth the mention. When getting a loan from the dealership itself, you’ll be starting and finishing the entire process completely in-house. You won’t have to wait for a loan approval from the bank nor as there’s no application processing time. You also don’t have to apply with multiple lenders backing you up, saving you a lot of time and unnecessary hassle. The dealership will be, in most cases, able to immediately provide you a guaranteed auto loan approval with which you can purchase the vehicle as soon as possible. If time really is money, then you’ve already saved quite a bit of cash by not dealing with third parties such as the banks.
The best part is that you set your own terms of repayment, not the bank. Want a seven-year loan? No problem. Want to stretch that time frame to nine years? Don’t worry about it. Dealerships like Auto Now are extremely flexible when it comes to making an agreement, most often than not they’ll go out of their way just to please you. The loan will be entirely based on what you need and want not on what the dealership requires. With banks, you play by their rules, not yours. Dealerships are much more laid back and stress-free. Each loan can be custom-tailored to match your needs, no matter if it’s a three-year loan or a nine-year one.
Competitive Interest Rates
People will bad or poor credit might soon realize that they have to visit an in-house financing lender. With poor interest rates, they’re two times worse than the banks. This is where the dealerships come in. Going through a reputable dealership and applying for a loan will yield interest rates similar to those found in conventional lenders. You’ll be basically getting the best terms possible from a dealership which only wants to move cars, not double-cross you. Dealerships have no real benefit from charging you with insane interest rates, as you’ll be purchasing a vehicle anyway regardless. It’s in their favor that they offer tempting interest rates to shift cars, essentially giving you the deal of a lifetime.
Low Down Payments
In most cases, you’re required to make a down payment before you even begin the purchasing or loaning out process. This wouldn’t have been so bad if the minimum down payment limit weren’t so high. In a lot of cases, it can stretch up to several thousand dollars, money most people with a loan don’t have. Luckily, dealerships require little or no down payments from their borrowers. As you can imagine, this can prove to be extremely useful as you won’t have to save up the money just to be able to afford it.
Rebuilding Your Credit
It’s a vicious cycle: you can’t rebuild your credit if you can’t get any credit to start with in the first place. The BHPH dealership system is the perfect way to start rebuilding your credit. Not only will they provide you with the basic transportation you require to live, but slowly start to reestablish the credit or rebuild a damaged one. As an installment loan, dealership financing is one of the best and fastest ways to improve your credit rating.