What Is Buy Here Pay Here?

Buy Here Pay Here (BHPH) refers to dealerships who don't use third-party indirect lenders to finance vehicles for their customers. They do the financing themselves. For this reason, these dealers are known as in-house financers, but are also referred to as tote-the-note dealers. Due to the fact that the dealer is offering the financing, the buyer will pay the dealership directly - hence the "buy and pay here" name - rather than through a bank or finance company.

Because these dealers offer buy and pay here cars with in-house financing, they are able to offer vehicles to people with all types of credit. Consumers who have been turned down for a bad credit auto loan - or subprime financing - will often seek out BHPH dealers, because these dealers typically don't require credit checks to purchase a car.

What You'll Need To Get Financed

When you are considering purchasing a car with a buy here pay here dealership, you will need to provide their finance manager with some basic documentation:

• Valid Photo ID - Depending on the dealership and the state you live in, this will usually need to be a valid driver’s license, although some dealers will accept a valid state ID.
• Proof of Income - This is perhaps the most important thing you will need to provide for your BHPH dealer. The finance manager will need to see check stubs verifying that you earn enough income, and will typically need to verify how long you have been employed. Most buy and pay here dealers will want computer generated W-2 check stubs, but others may accept bank statements.
• Proof of Residency - A buyer looking to purchase a buy here pay here car will have to show that they have a stable residence. This is usually proven by providing the dealer with a current utility bill in the customer’s name.
• References - Typically a BHPH dealer will need to see six to eight complete references with names, addresses and phone numbers. These can be friends, co-workers or family, but they cannot live with the buyer, and no two references can share the same address.
• Down Payment - Because you will be financing directly through the dealership, they will require a down payment before you can drive away. Additionally, with buy and pay here dealers you will most likely be required to make weekly, or bi-weekly, payments at the dealership, usually in cash.

The most important item that you will need is to provide proof of your income. With buy here pay here financing, dealerships use your source of income as if it was your credit score. Lenders typically will not need to check your credit score when getting approved for a buy here pay here auto loan.

Buy Here Pay Here Warranties

You'll find that most vehicles on buy here pay here lots are sold "as-is." This means you will be responsible for any problems or repairs following the sale. It's why we recommend that, once you've narrowed your choice to the vehicle you want, you have it inspected by an ASE certified master mechanic as well as a body specialist.

We also recommend that you purchase a vehicle service contract. These range in price from the most basic systems – such as engine and drivetrain, which are the least expensive - to more expensive comprehensive coverage that includes electrical systems and high-tech features. In most cases, you can either pay for the warranty upfront, or roll it into the purchase price. However, rolling it into the cost of your car will raise your monthly payment and also increase the interest costs of your loan.

Buy Here Pay Here Dealerships

It’s important to note that not all buy here pay here dealers report loans and payments to one or all three major credit bureaus—Experian, TransUnion and Equifax. Be sure to check to see your dealer does this before signing on the dotted line, otherwise, you will find yourself in the same situation the next time you need a car loan – even if you've made all your weekly or bi-weekly car payments on time.

Is Buy Here Pay Here Right for You?

Finding a good BHPH dealer can be stressful. That's why BuyHerePayHere specializes in finding dealers who can help with unique bad credit situations, even if you've been turned down for a subprime car loan. We help take the stress off your search by matching you with one in your area. Don’t let bad credit get in your way of buying a car. Get started today by filling out our auto request form. It’s is free and there are no obligation to purchase anything.