Buying a car can be a daunting task – and necessity. If you do not have cash available to buy a car, a loan is a way to go. But when you are suffering from bad credit, getting a car loan can be difficult. So why not consider using buy here pay here houston TX low down payment service?
For people with damaged or poor credit, it may be challenging to get a car loan. That’s the case both with loans from a bank, or a credit union. But buying a car with cash is not something just about anyone can do either. So what if you don’t have the cash to buy a car? That’s where a Buy Here Pay Here dealership comes in. Dealers that offer “buy here pay here” financing is both the seller and the lender. That’s why some also serve buyers with low credit scores.
Sounds great, right? But before you go on and decide where to get your car, read on! We have more information on buy here pay here houston TX low down payment for you to read. We also have similar articles for Springfield and Atlanta area. Read them next!
What is Buy Here Pay Here Financing?
As we mentioned, Buy Here Pay Here (or BHPH) is an alternative to the car loan system. How does it work? In this case, the dealership is not only the seller. The dealership also acts like the “bank” where you will get the loan from. So instead of making your payments to a third party, you make it directly to the dealer.
Some dealers do not use the term Buy Here Pay Here. Instead, they usually advertise with slogans like “we finance”, and “no credit, no problem”. Other phrases that may also be used are “tote the note”, and “on the spot financing”. So if you see either of them at your local car dealers, chances are they offer BHPH financing.
Because the loans are not from banks, it is a lot easier to get your car loan approved. Most dealerships only ask for proof of steady income and an address. As long as you can provide the documents, your loan approval is almost guaranteed! With how easy it is, many people choose BHPH dealerships to get their dream car.
But before you find the nearest BHPH dealership in your area, you need to understand more about BHPH financing. As with everything, there are always a good side and the bad side, like the two sides of a coin. That is also the case with Buy Here Pay Here financing. Other than the pros, there are also cons to this financing method. For more complete information on BHPH, read on!
Pros of Buy Here Pay Here
We have mentioned some pros to the Buy Here Pay Here financing such as an easier process for people with bad credit. But, there are a lot more advantages to BHPH financing that we have not mentioned. So read on to know why should you choose Buy Here Pay Here Financing!
Bad credit accepted
We’ve said this over and over again, but it is really one of BHPH financing’s strongest points! If you have bad credit or even no credit histories at all, the BHPH dealership can still approve your car loan. This is why they often advertise with terms like “no credit, no problem”.
Small down payment
Another feature of a BHPH dealership is the small down payment. Depending on the dealership and factors like the price of the car, you may only have to pay a very low down payment. It can be as low as $500 or even below. If you’re lucky, no down payment at all! Discuss with your dealer for more information, and to get the best deal possible.
Because a Buy Here Pay Here dealership also acts like a bank, the process will be much simpler. You can just come to the dealership, pick a car, discuss the payments, and go home with your new car. Plus, you will also make future payments directly to the dealership. It is a straightforward, simple process.
If you already own a car, this is for you. Some BHPH dealerships do not only sell cars but will also buy your car from you. So if you are thinking of getting an upgrade, finding a dealership that offers trade-ins may be a great option. All you have to do is bring your old car, and apply for their low down payment Buy Here Pay Here loan!
Cons of Buy Here Pay Here
Before you start Googling “Buy Here Pay Here Houston TX low down payment”, there are more things you need to consider. Despite all the good things about BHPH that we have mentioned above, there are also some cons. The downsides include its steep interest rate, to limited option. So read on to find out!
Higher interest rate
Car loans approved by BHPH dealerships usually have higher interest rates of around 20%. It is much higher compared to car loans approved by banks or credit unions. Auto loan rates at credit unions usually range around 4-5%.
If you consider the length of your loan repayment plans, this could get very expensive very fast. The cost may be cheap upfront with the low down payment. But, you also need to calculate how much you would have to pay in the future.
Danger of Repossession
About the higher interest rate, many customers have difficulties in paying back their car loans. In 2017, according to a report by the National Independent Automobile Dealers Association, one out of three borrowers defaulted on their loans. This is a problem if you cannot pay the installments on time. Because if it happens, chances are your car will be repossessed. That said, there’s a way to stop repo man from taking your car.
Limited car options
Instead of choosing a car and discuss the auto loan, BHPH dealerships do it the other way around. The dealers will take a look at the customer’s finances to choose cars in their financial range. Since only cars that the customers can afford will be shown, it may be a very limited option for some.
More payment requirements
While it depends on the dealership, most BHPH dealers usually need the more frequent payment for the loans. Usually, the payment is made monthly, but it can even be as frequent as weekly. Usually, the payment would also need to be made in person. That means the buyer has to live nearby. If you are thinking of getting a car from a BHPH lot, you will need to take these factors into account.
Might not help build credit
There is a huge misconception about Buy Here Pay Here dealership loan. Some people hear that BHPH loan can help repair credit from a website, or from people in town. Because BHPH dealership loans are usually only taken by people with low credit scores, it sounds so much better. It is a lot like killing two birds with one stone, and when it comes to repairing credit score… why not?
Unfortunately, that is just too good to be true. Understandably, people with bad credit want to repair their scores. But, the BHPH loan might not help with that. Unlike loans taken from banks, loans from BHPH dealerships are not usually reported to credit reporting agencies. This is the case, especially for smaller dealerships.
However, if you are more concerned about getting a car than repairing your score then this may be for you! Because loans with the dealership are not reported, nothing will happen to your scores if you miss your payments. So if you do everything right, it will not rebuild your score. But, it won’t make it worse either!
Buy Here Pay Here Houston TX Low Down Payment Dealership
Now that you know everything you need to know about BHPH financing, it’s time to start shopping! There are so many BHPH dealerships in the USA or even in Houston alone. So here we have compiled 5 of the best Buy Here Pay Here Dealership in Houston, Texas where you can get your new car, quick and easy.
CarMax is one of the biggest used car dealerships in the USA. Being one of the biggest, it also has stores all over the country. That includes Houston, Texas. In Houston alone, there are six CarMax dealerships! So if you are interested in checking their dealership, you should be able to find one near you.
When you buy a used car at CarMax, they will not always offer you the BHPH financing. That’s because CarMax also works with multiple financing sources, so the buyers can have a choice. When it comes to the down payment, it may vary between customers. If you can maximize your down payment, it will lower your monthly payment. You can also drive your old car for a trade-in, which also counts as a down payment.
Unlike CarMax, America’s Car-Mart only offers Buy Here Pay Here financing. Because it is a BHPH company, it is a great option for buyers who have faced difficulties trying to get traditional car financing. The company does not only limit its auto loan to people with bad credit. But also to those with no credit, have faced repossession, and even bankruptcy!
One of their main selling points is also the low-interest rates compared to other BHPH companies. So America’s Car-Mart may be a great option for first-time buyers. And if you have experienced repossession, filed for bankruptcy, or simply have bad credit, worry not! Car-Mart is one in a handful of BHPH dealerships that report to credit bureaus. So buying a car at one of their dealerships may actually help you rebuild your credit score. How good is that?
Credit Acceptance is an indirect subprime credit company that works together with dealers across the US. Because they work with many dealers, your options will not be limited to only used cars. You may also be able to buy new cars with dealers working with Credit Acceptance.
Another great point with Credit Acceptance is that they accept all buyers from the ones with bad credit, no credit, unemployment income, self-employed income, multiple open auto loans, even those who have filed Bankruptcy Chapter 7 and chapter 13. The company also reports your payments to three major credit bureaus, which means: credit rebuilding! Automated payments can also be arranged, so you will not have to worry about making late payments.
Another strong contender in the top five list of BHPH dealerships is DriveTime. With more than 100 dealerships across the country and more than 8.000 cars in their inventory, it has just about everything. Whether you want to get a used car, truck, van, or SUV, there must be something for you in DriveTime. The company uses an online auto loan approval application that can help you find out the necessary down payment before you even leave the house.
Similar to the other companies, DriveTime offers 99.9% loan approval odds. So again, if you need a car but have problems with the credit score, then this is for you. DriveTime also offers personalized financing, which means the down payment, and the payments will be personalized to you and your income. If you already have a car that you are thinking to trade in, DriveTime also works with Kelley Blue Book to give you a fair cash offer. So, you can both fairly sell your old car, and know if it will cover the new car payments, even before leaving the house!
Carvana offers everything a BHPH dealership offers, virtually. All you have to do is go to their website and search for the car that you want. The vehicles on Carvana cost from around $7000 to $100,000. The cars are sourced from their partners. That includes dealers, auctions, and trade-ins all over the country. Although everything is done online, you don’t have to worry about getting a bad car. The car detail pages have 360-degree tours of the vehicle, and a free CarFax report. Of course, a photo gallery is also available.
Carvana also checks the cars before putting it up on their website. That is why all the cars have the Carvana Certified mark on them. Carvana Certified also means the car has passed 150 inspection points. It also means the car has a clean title, no reported accidents, or fire, frame, and flood damage.
To get your car, you can choose from having it delivered to your door, or pick it up at the local Carvana market. If you’re lucky enough to live near one of their car vending machines, then you can also pick it up from there.
And, that is all you need to know about Buy Here Pay Here Houston TX Low Down Payment! With all the good things that BHPH financing has to offer, are you ready to get a new car? There is no more need to worry about credit scores or high down payment. Start your search, and begin your adventure.