Buy Here Pay Here
If you’re looking for a pre-owned vehicle, you may have heard or seen Buy Here Pay Here (often shortened to BHPH) in reference to independent financing at used car dealerships. The short definition is pretty self-explanatory: you make one stop to both find your car and finance it, instead of needing to deal directly with a bank or finance company.
Understanding how a dealership is able to offer this kind of financing can get a little more complicated. At G&E, we want you to know exactly what type of financing is available and how we’ll work together, whether you opt to finance with a traditional financial institution or start a BHPH plan through us.
Traditional Auto Financing vs. BHPH
The majority of auto dealers have a financial lender portfolio they go through when you are looking to purchase a car from them and will crunch numbers such as your credit score and income-to-debt ratio in order to figure out what type of financing you’re qualified for. If you want to avoid dealing with banks or are concerned that you’ll be rejected from a financing plan, many other dealerships will tell you, “tough luck.” And tough luck doesn’t really help when you need a car to get to work or take care of your family. You may feel like you don’t have another option. This is how BHPH financing can offer a solution for you.
When a dealership offers BHPH financing, you both purchase the car and deliver your monthly payments to the dealership, vs. making your loan payments to a bank or another financial institution. Some dealerships have borrowers deliver their payments in the form of cash or money order, as a condition of working with borrowers who are high risk for not providing adequate payment as part of their financing plan. The G&E team will work with you to make sure you have a payment plan and method that works in everyone’s best interest. Remember, in the case of BHPH financing, the dealership is lending both their own money and their product to borrowers.
Regarding the ways BHPH dealerships handle interest rates, BHPH plans are sometimes called high for the amount of interest they charge. We are working to change that image in the Philadelphia area. The average auto loan interest rate for subprime (credit score of 501-600) and deep subprime (300-500) borrowers is between 14 and 20 percent. Typically, BHPH dealerships will charge between 15 and 20 percent interest, so it’s not that different from what you would be offered by a financial institution. Knowing that you’re getting a fair deal is important when shopping around for BHPH financing.
How Buy Here Pay Here Works
Come to G&E to check out our selection of quality used vehicles. If you are interested in pursuing BHPH financing, let us know, and we’ll make sure you’re looking at vehicles that are within your budget. Once you choose your vehicle, keep in mind that you may or may not need to make a down payment on the vehicle, and we’ll calculate your monthly payment. After that, we just need a few signatures and you can drive off the lot the same day.
How We’ll Work with You
We know that very few people can afford to purchase a car in cash, and we don’t want to write you off because of your past credit issues. G&E will work with you to find a BHPH financing plan that will work for you. BHPH financing is an opportunity to become established with us, get a car, and start repairing your credit.