A WARNING ABOUT "BUY HERE PAY HERE" CAR LOTS
In a hurry to get a real car loan and your credit is not as good as it could be? Click here.
Don't "Buy Here Pay Here"! A bad credit car loan shouldn't take you for a ride...
Are you looking for a car, and have bad credit?
You might think a "Buy Here Pay Here" lot is your only choice. But don't assume that it is!
You've seen them, I'm sure. The lot with cars that are a few years older with "We Finance!" decals all over the windshields. "No Credit Application Refused!" Sure - they will TAKE any credit application, but will they APPROVE any credit application?
So, here are some things to think over when considering a "Buy Here Pay Here" lot.
A lot of them will advertise that "Your Credit Score Isn't Important At Our Door!" or "Ride Away Today While Rebuilding Your Credit!", or some other creative slogan. They are playing to what you think is your weakness - your credit score. A large percentage of Americans are in what is considered the "slow", "bad", or "low" credit score areas. We've got high interest rates, divorces, bankruptcies, foreclosures, and many other factors to thank for that. The truth is, it can happen to anyone. And, here comes this glowing dealership to make it all better!
Maybe...or maybe not. Tell me, have you seen...
"We'll Rebuild Your Credit!"
Not necessarily. There is nothing that guarantees that these guys will report your timely payments to the credit bureaus. It's a crapshoot at best. They might not report your on time payments, but you can bet if you are 30 days late on one payment, they'll get that to the credit bureaus right away!
"No Application Refused - Ride Today!"
Here's the problem...almost anyone can get a loan from these guys. But, they are for high risk credit reports. High interest rate (sub-prime) loans are very common. Usually with percentage penalties if you are late, or even if you pay off the loan early (referred to as a prepayment penalty). Another problem is that the vehicles they sell are bought at auction or liquidated from fleet use. High mileage, low resale value vehicles, usually several years old, and sometimes even wreck rebuilds or dealer buy-backs (bought back because of owner dissatisfaction with the vehicle's problems). And, most of the time, the instant you buy the car, you're upside down in it and have few options to get out of it should something happen (like it breaks down and it'll cost more to fix it than it is worth...and you end up making 3-4 years of payments on a lawn ornament).
"Warranties on every car!"
Yes, these dealerships often offer warranties. But, you need to be very diligent about the warranty terms, and the guarantor or the warranty. A lot of times, these warranties are issued by companies that have a very limited number of service centers. No sense in buying a car and getting the warranty when the only place that will service your car under that warranty is a small shop somewhere south of Blue Hill, Nebraska that is open from 8 to 1 Monday through Thursdays by appointment only. Moreover, keep a close eye on what the warranty covers. Some policies are written to confuse the holder into thinking more is covered than what actually is.
Here's a bad thing about the Buy Here Pay Here places. They see you coming a mile away. They know why you are there, and they are going to attempt to get as much money out of you because of your situation. You are limited to what THEY have on their lot.
I've been raked over the coals by one of these lots before. I had pretty bad credit, and I went to a lot in the Kansas City area looking for a truck. I found a 1995 Dodge Dakota Club Cab that I liked. It had just over 60K miles on it, so I figured it would be ok. Well, I was wrong. After paying more than the truck was worth, not long after I bought it, it needed a timing chain and 4 new tires. $1500 I didn't want to spend!! Adn, the dealership didn't care. When I had to skip a couple of payments to fix the truck, their response was "Sorry, you can pay late if you want but you're gonna get nailed with some late fees". I had a mind to drive the thing through their door.
Fortunately, you have another choice - and it allows you the freedom to shop around and look at what you want where you want it. You've heard of those websites that let lenders compete over your business for home loans?
There's one of those for car shoppers now! It's Any Credit Auto Loans, and they CAN help you!
Any Credit can help just about anyone who needs an auto loan. They specialize in bad credit and bankruptcy cases, and the best thing is that you aren't stuck at one dealer and their inventory. Fill out a NO OBLIGATION credit application to see how they can help you today. DON'T get stuck in the "Buy Here Pay Here" trap like I did!