Drive Casa Official Blog
Buy Here Pay Here – F.A.QBy DriveCasa Team | Posted in Credit Score on Monday, May 10th, 2021 at 4:14 PM
- How does a buy here pay here car dealership work?
- Which car dealership is best for bad credit?
- How do I finance a car with bad credit or no credit?
- How long does a buy here pay here credit approval take?
- Should I buy a car from a buy here pay here?
- What happens if you stop paying on a buy here pay here car?
- Can a dealership shut your car off?
- Can you move out of state with a buy here pay here car?
- Do buy here pay here car dealerships report to credit bureaus?
- Can I refinance a buy here pay here car?
You know you need a car. But your finances are in too much disarray to qualify for a traditional auto loan, it may be time to turn to other options.
The good news? You don’t need stellar credit to afford the vehicle you need. Having no credit or poor credit may require you to think outside the box, but if you know your options, you can often find a great car at a price that works for you.
Our job is simple: to make cars accessible for buyers like you. Hey, we get it. Life throws curveballs. But life’s many surprises shouldn’t hold you back from buying a car.
For many people with bad credit or no credit history, buy here pay here dealerships are often your best option. That’s why we’re the go-to choice for many buyers with bad credit or no credit history to buy a car. And once you have the car, you have workable options to pay it off.
Sound like the right fit? Then let’s talk about how to make your car affordable and accessible.
But hey, we get it. Buying a car is an undertaking. You want to make sure you’re making the right call. Here’s the good news: you’ve got questions, and we’ve got answers.
Here’s a look at some of our most common questions so that you can make the right call for yourself–and get the car you need to keep your life in gear.
1. How Does a Buy Here Pay Here Car Dealership Work?
We’re a buy here pay here car dealership, which is exactly what it sounds like on the tin. You buy here. You pay here. Yup, it’s that simple.
In a traditional car dealership, the dealership passes the contract on to an auto lender, who then provides a loan for the auto purchase. In other words, there are a couple of third-party layers.
For people with bad credit, the issue comes from the auto lender. The most common is a direct lender, i.e. lenders you apply to directly. These include banks, credit unions, or online lenders. This is usually the point at which the lender looks at your bad credit, sees a high-risk borrower with a high risk of not paying back the loan, and says no dice. At this point, the car dealership says better luck elsewhere.
For this reason, many people with bad credit think buying a car is impossible since they can’t get approved at a traditional car dealership.
Buy here pay here dealerships work differently. Rather than turning to an auto lender, they sell and finance cars on their lot. Basically, they function as the dealer and the lender, which gives them far greater leeway to approve people with bad credit. For this reason, buy here pay here dealerships specialize in working with buyers with bad or nonexistent credit.
This comes with several benefits. For one, there’s a much shorter wait time–there’s no waiting on a finance manager to contact lenders for approval. Plus, there aren’t as many qualifications required to establish eligibility. If you have a down payment and income to make your car payments, you’re usually good to go.
2. Which Car Dealership is Best for Bad Credit?
A buy here pay here car dealership is usually the best choice for people with bad credit or no credit history.
In a traditional car dealership, you have to pass a credit check and get approved for a loan from an auto lender. The credit check shows your weak or nonexistent credit score, the lender assesses you as a high-risk borrower with a high potential of not paying back what you owe, and they refuse to offer the loan.
Buy here pay here dealerships offer several benefits for those with bad or no credit.
Traditional dealerships have a mix of customers with good and bad credit. Buy here pay here dealerships work exclusively with those who have bad credit or no credit. And unlike traditional dealerships, which rely on outside lenders to finance the loan, buy here pay here dealerships finance the loan with their own money, which is why they can approve a loan for those with bad credit.
In addition, buy here pay here dealerships offer far fewer barriers to entry than traditional dealerships. Many buy here pay here dealers ask for proof of residency and employment as qualifiers and instead use your credit score and income to determine what type of payment works best for you.
The in-house lending practices of buy here pay here dealerships also work in your advantage because they look at your ability to repay, not just your credit score. It’s all about your current income.
3. How Do I Finance a Car With Bad Credit or No Credit?
Your best option for financing with bad credit or no credit is to use a buy here pay here dealership.
Traditional car dealerships finance through outside lenders, usually a bank or credit union. In other words, the loan doesn’t come from the dealership, which means they’re not the ones to approve the loan.
This is a critical barrier to entry for those with bad or nonexistent credit. Lenders want confidence that a borrower will pay their loan back on time and in full. Those with good credit are low risk because lenders look at their credit history as assurance that they’ll pay back the loan responsibly. The lower your credit score, the higher the lending risk, because there’s a higher perceived chance that you won’t pay back what you owe.
Buy here pay here dealerships sell and finance cars themselves. In other words, the dealership puts its own money down on the loan. This allows them to decide who they approve for loans. And because they only look at your income to assess if you have the liquidity to afford your loan, rather than your past credit history, they’re much more forgiving with financing.
It is worth noting that buy here pay here dealerships require you to come in with your down payment. In addition, because buy here pay here dealerships are putting their own money down on a loan and lending to a higher risk borrower, you will see higher interest rates.
4. How Long Does a Buy Here Pay Here Credit Approval Take?
When you buy a car from us, it only takes a few minutes. Yup, you read that right. Minutes.
No matter your financial situation, our experts can tailor a package that’s custom-made for you. We have experience with a wide range of financial institutions, so we know how to provide financing for all credit levels.
And because we know our way around a variety of financial situations (hey, we get it, life happens) we happily accept and approve people with a variety of financial concerns that may have gotten you turned away from other dealerships, such as:
Low credit score
No credit score
Late credit card payments
We know that life has a way for throwing curveballs. But that shouldn’t stop you from being able to drive off happy with the car you need to live your life.
Like other buy here pay here dealerships, we do all of our financing in-house. That way, we don’t need to wait for an outside lender, and you don’t need to worry about running into a wall with a traditional lender. Instead, we can take a look at your financial situation, look at your income and ability to pay, and work with you to craft a financial package that’s perfect for you.
And yes, to reiterate: it only takes minutes. That’s the beauty of doing financing in-house. We’ve got the experts. You’ve got the information. So let’s find a car and financing that work for you.
5. Should I Buy a Car from a Buy Here Pay Here?
Yes–if you buy from Drive Casa, of course!
A buy here pay here dealership is usually the best option for people with poor credit or no credit history. It’s much more forgiving than a traditional dealership and makes car ownership accessible for people who might not have otherwise been able to buy a car. That’s because we tailor our services to meet the needs of buyers like you.
When you buy with us, credit isn’t a limit. We verify your residency and employment, figure out your ability to pay and a budget that works for you, and then we get you on your way with your new car. We’re not here to turn people away because of some financial rough spots. We’re here with one goal in mind: to help customers like you drive off happy.
That’s what makes us different from a lot of other buy here pay here dealerships. We’re family-owned and family-focused, and we’re here to make sure you have a comfortable, friendly, low pressure buying experience.
After all, we know the car buying experience can be stressful. Especially for would-be car owners like you with poor credit or no credit history. We’re here to tell you that buying a car is possible, and it doesn’t have to be a stressful experience. And when you buy from us, we guarantee it won’t be.
Your happiness and your best outcome is our number one goal, and we’re proud to help hardworking people going through tough situations afford a car for their families.
6. What Happens if You Stop Paying on a Buy Here Pay Here Car?
Life happens. We get it. And we work with a lot of families who are working hard to get out of tough spots. And sometimes, those tough situations make it hard to keep up with car payments.
If you stop paying on your car, that’s considered defaulting on your loan. Legally, once you default on a loan, the lender who financed the vehicle has the right to repossess the vehicle.
Depending on how far behind you are, the lender can repossess at any time. Texas law does not require advance notice of a repossession except in the case of mobile homes. One exception might be if the lender promised (and signed their agreement within the terms of a written contract) not to repossess your vehicle upon receipt of certain payments.
As with any loan, the best way to maintain smooth sailing is to pay on time. However, if you fall behind on your loan or anticipate that you may have late payments, talk to our team as soon as possible. That way, we can work with you to figure out a workable solution.
If you fall behind, work with our team to let us know, and try to resume payments as soon as possible.
If you can’t make your car payments and know your financial situation is unlikely to change, your best option to avoid repossession is to return the vehicle. This will not cancel your liability for the loan, but it removes the stress of worrying whether you’ll be stranded upon repossession. Again, work with us as soon as possible to find a solution.
7. Can a Dealership Shut Your Car Off?
We’re not Big Brother. However, dealerships can shut your car off remotely, as can a repossession professional with the dealership’s permission.
This is due to starter interrupter technology which, when combined with GPS tracking, allows a dealer to remotely track your car and disable it from starting (as long as the car isn’t moving). This is done as a security measure for buyers with poor credit who default on loans and go to great lengths to avoid repossession–the technology makes it easier for the dealer to find the car.
When buying a vehicle, carefully read the contract, including disclosures. Under the Truth in Lending Act (TILA), Regulation Z, the following must be disclosed in a written contract when you purchase a car:
Disclosure that the lender has retained all or part of the amounts charged to you
Accurate disclosure of the vehicle price
Accurate disclosure of the total amount being financed
Unfortunately, disclosure laws related to starter interrupter are more scattered.
We always recommend that our customers come in with as much financial knowledge as they can so that they can make the right choice for their own situation. That includes a thorough discussion of what will happen if you fell behind on payments, including the dealer’s next steps. We recommend talking in detail with a representative, including asking for details of starter interrupter devices installed in your car.
8. Can You Move Out of State with a Buy Here Pay Here Car?
Yes! There’s nothing stopping a buyer from crossing state lines with a new or used car. The issue is simply staying current on your car payments, nothing more or less. That said, there are a few things to keep in mind if you buy a car out of state or move out of state after buying a car.
For one thing, you’ll have to re-register. Each state has different laws about vehicle registration, so make sure to check in advance, and keep in mind that your car may need to pass a state inspection before you can re-register it.
Sales tax applies depending on when you bought your car in relation to moving. If you know about your interstate move in advance, it’s a good idea to buy and register your car three months prior to your move so you don’t have to re-register it and pay sales tax in your new home state.
If you buy a car in your soon-to-be home state, dealers often handle out of state buyers by collecting sales tax at the time of purchase and send it to your home state. Dealers tax out-of-state buyers as if they live in the state where they’re buying the vehicle, so if your home state’s sales tax is higher, you may have to make up the difference. Make sure to get a bill of sale from your dealer with sales tax included in the purchase price to avoid any confusion when you register the car with the DMV.
9. Do Buy Here Pay Here Car Dealerships Report to Credit Bureaus?
For folks who have bad credit or no credit, having on-time payments reported to credit bureaus is a great way to build (or rebuild) your credit score. The trick is that many of these car buyers can’t qualify for a loan in a traditional car dealership based on their credit.
Buy here pay here car dealerships like us make the car buying process accessible for hard working would-be car owners like you, no matter what kind of tough situation you’re going through.
Unfortunately, not all buy here pay here car dealerships report to credit bureaus, which means you don’t get credit for your on-time car payments. It varies widely depending on the dealership. It simplifies the process for those dealers, since it’s less financial paperwork to wade through–but the buyer is the one who pays the price in the long run.
At Drive Casa, our goal is always your best outcome and your happiness. We’re a family-oriented business that’s proud to work with hard working families like yours, including those going through tough situations, so that they can get the vehicle they need to get out of that tough situation.
We’re happy to walk you through your options when purchasing a vehicle, including building a financial package that works for you, explaining the details of your purchase contract, and how it will impact your credit score. Our goal is your happiness, and that includes financial education to make the right decision for your buying needs.
So when you come in to buy a car, don’t be shy about asking questions! We’re here to help you.
10. Can I Refinance a Buy Here Pay Here Car?
Your car loan is not a life sentence. It’s intended to help you buy a car, not trap you in bills you can’t keep up with. We work with hard working families and people going through tough situations, so we know that sometimes, the road ahead looks a bit rocky.
This is when some buyers turn to refinancing, which is when you take out a secondary loan to pay off the balance on the existing loan, typically secured by the car and paid off in fixed monthly payments over the course of a few years. Buyers often turn to this option to lower their interest rates, making their payments more affordable.
It is possible to refinance a buy here pay here car loan, though there are a few challenges attached to it. Depending on the age and condition of the car, not all lenders may be willing to refinance it (we put all our pre-owned vehicles through a multi-point inspection).
Second, refinancers tend to be traditional borrowers, and if your credit score is still weak, you may run into the same issues that led you to seek a buy here pay here vehicle in the first place.
That said, it’s always worth a shot to see if you’re eligible–you won’t know until you ask, and the worst they can do is say no. You can also boost your chances of approval through other avenues, like getting a cosigner or building credit in other ways.
The point is that there are ways to make your car affordable so that you can live your life. The key is to be aware of your options.
The Car Dealership You Need for the Car You Want
We know that sometimes, life gives you lemons. We help hard working families like yours find their way out of tough situations by making the car buying process easy, affordable, and accessible. We know you may have gone through some stress to get here, and we’re here to make it that much simpler.
If you’re ready to check out our options, feel free to browse our online inventory. We add new vehicles all the time, so if you don’t see one you love, use our quick and easy Auto Finder to get an email when your desired vehicle arrives.
And if you’re ready to take the first step toward an affordable vehicle, click here to get started with the online approval process.