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Though no one can go back and make a brand new start, anyone can start from now and make a brand new ending. - Carl Bard
So for all those who feel dejected because they are not able to buy a car, there is something to cheer you.
If you are not able to buy a car because of your bad credit score, then you can go to a BHPH (Buy Here Pay Here) dealer. A BHPH dealer will help you buy a used car, with high mileage. The dealer will not only sell you a car but also finance you. So, you need not go to a bank or a financer. It is simple, you buy car and pay for your car at the very same place.
Many car dealers have BHPH lots as an alternative financing option. A BHPH dealer usually has sign boards which convey the meaning- "We Finance Anyone".
BHPH dealers sell cars to individuals with bad credit score, so it's obvious that high risk is involved. And for the same reason, you will have to pay higher interest. They may charge more than 25%. But they cannot charge exorbitant rates against the State Law.
Most dealers won't ask for your credit score, they will be more interested in your ability to make payments. They will also need you to make a down payment for the car, so in future if you are not able to make payments, they won't suffer a major loss. But keep in mind that not making payments is not an option because if you don't, the dealer will immediately repossess your car.
BUY HERE PAY HERE has the following major characteristics.
>> Generally the dealers deal in USED cars only
>> The dealer won't require your credit history
>> You will be required to make a down payment
>> You will have to make payments to the car dealer only
>> Your dealer won't report your loan details to credit bureaus, so the loan will not show on your credit report
A BHPH dealer is different than the traditional dealers.
The financial part is often discussed at the end when it comes to traditional financing whereas it is exactly opposite with BHPH dealers. The BHPH dealer will understand your financial condition and show you the available cars within your budget.
So when you are at a BHPH dealer, you will have to make a choice from the given car options only. Whereas if you are at a traditional dealer you can choose whichever car you like and then go on to the financial aspect.
What are the requirements for BHPH financing?*
If you want to avail a car loan from the dealer, you should-
>> Be a licensed driver
>> Have a stable job
>> Have proof of residence
>> Fulfill the minimum monthly income criteria
>> Pay down payment along with any Title Fee and other fees
>> Have no repossession within the last 1 year unless included in a bankruptcy
Which documents are required?*
>> Drivers License, ID Card
>> Social Security Number(SSN)
>> Proof of employment and income (copy of recent paycheck or bank statement)
>> Proof of residence (copy of lease agreement or mortgage papers)
>> Current Phone Bill or any other utility bills
>> Proof of Auto Insurance
>> Financial Information (bank info)
>> Contact No.
>> References
*This is not an exhaustive list and the dealer may ask for more than this, which you will have to provide.
Payment Options
The payments are to be made weekly or bi-weekly. It all depends on your contract.
The dealer may ask you to physically bring in cash every week. So it is important that you have the dealer near you. Some dealers may even allow you to make online payments or via phone. Some may ask for an automatic withdrawal if you have a bank account. Negotiate even for the payment methods so that it becomes convenient for you.
Also the dealers follow a zero tolerance policy so make sure that you don't make any late payments.
Every coin has two sides - YOU need to be careful
When you set out to buy car and decide for a BHPH dealer, ensure that you understand every aspect.
There are few things that you need to give attention while buying a car.
1> The Quality of Car
It is often considered that the cars that BHPH dealers have in their inventory are the rejected cars (rejected by other traditional dealers). So you should be smart and ask for the history of the car. It is essential that you have an idea of the car so that you don't buy a lemon.
2> Down Payments
If you are in financial trouble, then making a down payment is also very difficult. So at this point of time, a BHPH dealer won't be able to solve your problem. Most of us go for BHPH only when other traditional sources of finance have been exhausted. But you still have the option of going online and availing finance.
If you search, you will get good options of financing your car.
Nonetheless, BHPH is the last resort. If you cannot avail loan anywhere, you can go for this option. So exhaust all other options and if you don't get a positive response from anywhere, then go for BHPH.
All the best!!!
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