Buy Here Pay Here Washington, DC

People with bad credit often search for buy here pay here auto financing because the credit requirements to get approved at these car lots is far less than the requirements of a bank or credit union. Not all buy here pay here dealers car lots, however, are the same. Typically the phrase buy here pay here applies to a used car lot where the owner of the dealership lends his or her own money to consumers who cannot get approved elsewhere. There are actually three types of on the lot car dealer financing:

1. Buy Here Pay There
2. Buy Here Pay Online
3. Traditional Buy Here Pay Here

Buy Here Pay There

A large portion of dealers that advertise for buy here pay here on the lot auto financing should really be called buy here pay there, since they utilize a third party to process and collect the loan for them. The most popular if these third party loan processing companies is Credit Acceptance Corporation in Southfield, MI . After the transaction has consummated at the car lot, the loan processing company takes over. All car loan payments are remitted to the loan processing company. There are two advantages of using a Buy Here Pay There used car lots. First, loan processing companies report your payments to three major credit reporting agencies, Equifax, Experian, Trans Union, thus allowing you to improve your credit score if the car loan payments are made in a timely manner. Second, just like a normal car loan through a bank or credit union, payments are remitted monthly, instead of weekly or bi-weekly at the car lot. Repaying the car loan this way is more convenient for most car buyers.

Buy Here Pay Online

Another subset of the Buy Here Pay Here dealer community are car lots that install a GPS tracking, starter interrupt, or payment reminder device, from companies like GPSTrackIt, on the used car you buy. Dealerships that install these devices typically subscribe to an online service that lets you make an online car loans payment via a credit or debit card. If the payments are late, a payment reminder will sound when the vehicle starts, if payments are not made within the terms and conditions of the auto finance contract, the vehicle will not start, and the auto dealership will activate the GPS tracking to locate and repossess the used car. Aside from the annoyance of the payment reminder, Buy Here Pay Online technology has saved consumers several trips to the used car lot to make payments. This form of auto financing, however, only shows up on your credit report if the vehicle is repossessed, not if you make the payments on time.

Traditional Buy Here Pay Here

When people with bad credit think of buy here pay here auto loans, this is typically what they think of. With this form of auto financing the terms of repayment are negotiated on the lot at the time of sale. The car loan repayment terms usually mimic the paycheck schedule of the car buyer which, for example, weekly, bi-weekly, twice monthly, or monthly. Every time you get paid, you pay the car lot. These traditional buy here pay here car lots may, or may not, install a device on the used car, on rarely will they report your payment history to the credit bureau companies.