Posted on February 7, 2023 by Rick Griffith

Buy Here Pay Here (BHPH) dealerships can be a viable solution for people without existing credit or who might be struggling financially. These dealerships provide in-house financing options with flexible payment plans and, in most cases, can ease the approval process.

With BHPH dealerships, you get the car you need and want without worrying about your financial situation holding you back.

BHPH financing often works based on providing car buyers an affordable avenue to make installment payments, frequently ranging from 36 to 48 months. To retain ownership of the car, the buyer agrees to make regular on-time payments until the loan is paid off to the dealership. Car loans paid on time can be a very good way to improve your overall credit score.

Before customers enter into a loan repayment agreement with a BHPH dealership, it’s essential to understand that BHPH financing can occasionally come with high interest rates and shortened repayment terms compared to traditional auto loans.

Overcome Common Misconceptions About BHPH Financing and Dealership Myths

With BHPH car loans, some things need to get clarified to avoid confusing or misleading statements so you can make an informed decision. To clear up any confusion, here are some of the most common misconceptions and how to overcome those views.

By understanding these myths and how to overcome them, you will be better prepared to make the best choice for your financial future.

Myth 1: Interest Rates are 30% or Higher at BHPH Dealerships

People tend to believe that interest rates at Buy Here Pay Here dealerships are overly high. In reality, it works on a sliding scale, ranging from as low as 7% to as high as 30%, and is entirely at the dealership’s discretion.

Many BHPH dealerships conduct a soft credit check that allows them to see your existing lines of credit, payment history, collection accounts, tax liens, employment confirmation, and other public records. You’re best step is to talk with the BHPH dealership to find out what interest rate you might get before signing any documentation.

Myth 2: BHPH Dealerships Don’t Recondition Vehicles

The average American will put 12,000 miles on their car every year; between commuting to and from work, running errands, and taking family outings or vacations. That means the liability is on these dealerships to sell safe, reliable cars to the public.

Almost all BHPH dealerships offer a limited time warranty of up to a certain number of miles or for several months. But even fewer of these dealerships sell vehicles without first fully reconditioning the cars for reliability and safety.

It is more cost-effective for a BHPH dealer to recondition the car before selling it than it is to fix it under a warranty. They will still have a warranty, but the BHPH dealer wants it fixed right before putting it on the street.

Myth 3: BHPH Dealerships are Not Regulated

The simple fact remains BHPH dealerships do get held accountable by state legislators. In the state of Missouri, anyone selling a vehicle—new or used—to make a profit must have a dealership license, including the following:

• Franchise Motor Vehicle (dealerships)
• Public Motor Vehicle Auction
• Used Motor Vehicle (dealership)
• Wholesale Motor Vehicle Auction
• Wholesale Motor Vehicle Dealer

In addition, consumers can verify a dealership license as active by visiting the Missouri State Department of Revenue’s website to look it up. It’s a critical fact-checking step that all car buyers should practice. Because any “unlicensed dealerships, who present themselves as a private party to evade regulation,” is curb-stoning—an illegal practice that often leaves victims without any recourse.

A phrase that is synonymous with customers often being left with a “damaged, dangerous, or uninsurable vehicle.” So always be on the lookout. Do your homework, and report curbstoning.

Another important note is that BHPH dealers are considered finance companies, so each state’s consumer finance division requires a state license.

Buying a Safe, Reliable Car

If you are looking to buy used, Rick Griffith, the owner of Car Credit, says, “make sure the vehicle is safe to drive, whether you’re buying it from a dealer or an individual.” Rick and his team commit to “extensive reconditioning on every used car they sell to meet all safety and reliability requirements.”

It is central to their business focus to ensure each vehicle at the dealership “drives off safely and reliably, regardless of the price on our vehicles,” says Griffith. At Car Credit, you are always entitled to receive a detailed copy of the reconditioning expense. All you need to do is request to see it. Any reputable dealer should be willing to show you this information.

Be sure to ask your mechanic to assess a used car before buying. It’s the difference between safety and reliability. To speed up your car buying experience with Car Credit, begin by looking through Car Credit’s current used cars for sale in their online inventory and complete an online credit application today! 

The team at Car Credit wants to make your car buying experience efficient and fast. After completing your online credit application, a member of the Car Credit team will contact you to answer questions and schedule a time for you to test drive a car and finalize your car buying experience.

If you have any questions in advance, you are always welcome to call, or visit your nearest buy here pay here dealership, Car Credit, today!