Purchasing a car at a buy here pay here near me dealership may sound like a great idea to people with poor credit. However, it’s not always the best option.
What us buy here pay here?
Most buy here pay here dealerships charge higher interest rates than what you would pay with a traditional auto loan. This makes payments more expensive and inconvenient. Also, the car may be more expensive than its fair market value.
Aside from high interest rates, the dealership may charge additional fees. They may also try to push you to buy a warranty or GAP insurance policy. You may be able to save some money if you shop around.
Most buy here pay here car lots also charge higher than fair market value for their vehicles. Those with poor credit may be suckered into paying more than they should. They may be stuck with a car that is not their style or choice. This can lead to financial problems down the road.
Not all buy here pay here dealerships report payment histories to major credit bureaus. They may also be hesitant to offer you the most important credit-related piece of information, a good credit score. Luckily, there are other options. You can go to a bank and get a traditional auto loan with a good interest rate, or you can shop around for a better deal. You may be able to find better deals at a credit union or a lending institution.
You can also do your research to find out if a buy here pay here dealership reports to the major credit bureaus. If you’re interested in purchasing a car from a buy here pay here lot, it’s a good idea to ask them about their reporting to the major credit bureaus.