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How Buy Here Pay Here Financing Works

Buy here pay here financing may be an option for you when buying a new car.
Buy here pay here financing may be an option for you when buying a new car.
Photo provided by Emilio Labrador via Flickr.

If you need a car, have a full time job, but bad credit, there is hope for you. Buy here pay here financing may be the option that gets wheels under your heels.


A buy here pay here (BHPH) car dealer is one who will sell you an automobile as well as finance it for you. The loan will be from them but most likely underwritten by another financial institution.

Pay Location

When you pay your bill, you will pay it in person at the dealership where you purchased the car. Most BHPH car lots will not accept mailed payments.

Just as sure as you cannot mail them a check, you cannot pay them with one in person either. They will only accept cash or money order payments.

Pay Frequency

Unlike normal car financing, you will pay your car's bill more than once a month. You will be required to either pay your bill bi-monthly or weekly.

Also, you will not have as much of a grace period as you would with a normal bank's loan agreement. The BHPH dealer will be more likely to come repossess your automobile much sooner after missing a specified amount of payments.

Credit Report

These specific car sellers do not always report your payment history to the credit bureau. If you are making your payments on time, the only thing you are guaranteed is a car versus a stronger credit score. On that note, ask the loan issuer if they will be reporting your actions to the credit bureau if you are looking to build your credit reputation.

Bad Credit Friendly

BHPH dealerships are not really concerned with your credit score. Instead, they want to know if you can make the payment for the car(s) you qualify for.

Pay Amount

Being that you are at the BHPH dealership's mercy, they will determine your payment amount and its frequency. On that note, you can expect to pay a high interest rate, especially if they view you as a high risk.

Car Selection

The car selection at a BHPH dealership will be much lower than that of a normal commercial car lot. Therefore, do not get too wrapped around going for the car you want when going the BHPH route. However, be willing to accept the car(s) you can afford.

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