What is "Buy Here Pay Here" ?

Your introduction to the world of Buy Here Pay Here financing Chances are that you've seen the words "Buy Here Pay Here" painted across the windows of a local car dealership , it's difficult to understand anything from those four words.

What does Buy Here Pay Here mean? Despite being the fastest growing segment in the auto sales industry, there's not an official definition for Buy Here Pay Here in the dictionary. Buy Here Pay Here (BHPH) financing means that you arrange a loan and make payments on it at the dealership. You purchase the car through what's referred to as in-house financing versus through a third party, such as a bank.

Instead of making monthly payments to a traditional lender, you make weekly or bi-weekly payments at the dealership. Although some BHPH dealerships will accept payment by phone or online, many require that you physically bring a check or cash to their location. You therefore "buy" the car at the dealership and "pay" on the loan at the dealership.

Who should go to a BHPH dealership? BHPH dealerships are primarily designed for shoppers who may have experienced significant financial problems. If your credit score is on the lower end of the scale or if you've had trouble getting an auto loan, a BHPH dealership should be one of the places you visit during a car search.

What are the benefits of BHPH financing? 1. Available cars, available credit
Without a doubt, the most important benefit of BHPH financing is that it gives credit-challenged people the opportunity to get much-needed transportation. In many cases, BHPH dealerships aren't just an option—they may be the only option when someone has been turned down by traditional loan institutions. The chance to choose from available cars, make affordable monthly payments and enjoy the freedom a car offers can't be overstated.

2. Opportunities to improve credit
One of the ways to rebuild a credit history is to make timely payments on an installment loan. If you consistently make payments on a BHPH car loan, many dealers will report that positive behavior to the credit reporting agencies. Over time, your credit score can improve. Make sure you ask the dealership if reporting is a policy they follow.

3. Trade-in flexibility
BHPH dealerships tend to be more forgiving when it comes to accepting trade-ins on older model cars. That's because these types of dealerships understand the value and benefit of getting long-term use out of cars that many traditional dealerships would not accept. They are more likely to find a buyer for your car and thus more likely to take it as part of a trade-in.