Buy Here Pay Here Car Financing Basics
So, you’ve probably heard of a buy here pay here car. It’s a car purchased from a car lot that offers in-house financing. For most, this is where the knowledge about buy here pay here car financing stops. The whole process is rife with misinformation from all areas of the internet, social media, and word of mouth - from rumors about high interest rates on cars to misinformation about the quality of vehicles sold at buy here pay here dealerships. While most of this misinformation can be overlooked, there is one thing that buy here pay here car dealerships are notoriously bad at, and that is explaining the financing basics to people who don’t understand it.
Once you understand the basics of buy here pay here financing, the prospect of purchasing a buy here pay here car will not be so scary. It’s a simple process that, with the right tools, can help people get the vehicles they need and rebuild their credit quickly.
Start By Taking a Look at the Online Application Process
If you’re reading this, you know how to use a computer (or, at least, have someone who can show you how to use a computer). That means that taking a peek at our online application will help you understand buy here pay here car financing basics. With bank or financial institution-based loan applications, you are asked intrusive questions that revolve around your credit score. This is because your credit score is the primary way that banks or financial institutions determine how much they are willing to lend to you.
Buy here pay here establishments are different because they will lend to anyone, regardless of credit. You can notice the difference on the application - instead of focusing on information revolving around credit scores, we instead ask about your income and other determining factors. Looking at the online application process should not only put people at ease but should help them see the basics behind how our application process is different. Hopefully, that will encourage those who are on the fence about applying to at least seek out more information.
Map Out Your Plans
If you’ve looked at the application and think that getting a car from a buy here pay here lot might be a good idea, you should then take a moment to map out your plans for payments and for what you want in a car. All this information, while not on the application, will help the representative at the dealership help you make good decisions about what cars to buy. While a buy here pay here lot will never always have the vehicle that you want, if you have an idea of what you would be willing to pay per month as well as what type of car you would like to buy, this will help dealers lead you toward vehicles that are in your budget and that also fit with your needs.
Gather the Necessary Documents
After planning, your next step is to apply for financing. Unlike many mainstream loan options, you can apply for a loan online with only a few documents. Make sure that you have proof of income as well as reference contact information, and you should be squared away to fill out your application.
Buy here pay here loans typically do not run credit checks, which are part of why traditional loan applications take so long. Therefore, approvals at buy here pay here car dealerships are much quicker than your typical loan approval. This is ideal for anyone who needs a new car quickly, or who might just be fed up with the lending processes that you’ve had to go through before. Once you are approved, your next step will be to meet with a representative from the lot so that they can discuss your options.
Meet With a Representative
Meeting with a representative is an integral part of the financing process. You’ll be approved for a certain amount, but meeting with a representative helps clear up any parts of the process that might be unclear to you as a potential customer. The representative will go over how much you are approved for, how the dealership came to that number, and what cars on the lot fit within your lending amount. This is an ideal time to talk to a representative about what you are looking for in a car, that way they can find a vehicle in their inventory that meets their standards.
Find a Car & Make a Down Payment
Once you’ve discussed your payment terms with your representative, you will find a car that works for you. Then, you’ll make a down payment on the vehicle as discussed with the dealership representative working with you, and you’ll sign ownership papers. Keep in mind that you may not need to make a down payment, it will depend upon your dealership’s terms. However, down payments are standard with most car purchases. If you opt not to make a down payment, you might notice that your payments are a little higher than expected.
Make Payments Toward Your Car!
Like you would with any car that you purchased, be it from a buy here pay here lot or otherwise, you’ll begin making payments on your vehicle after you get the car in your possession.The length of your repayment may vary, but generally, buy here pay here cars take much less time to pay off. The payments might be a bit larger than expected, but usually range between $150-$300 per month for the average buy here pay here car. Traditional dealerships and bank loans often have repayment amounts, which are that high, but the repayment time can last as long as ten years. Generally, buy here pay here cars are paid off within three years, wherein the car is officially yours.
Auto Bank is a staple of the Kansas City greater metropolitan area, serving Gladstone, Kansas City Northland, Parkville, Liberty, and more. We have two easy-to-reach locations in Kansas City that are ready to help you get the car you need and get started on the next leg of your auto adventure. For more information, stop by our East Truman Road location or our East Front Street location for more information. Or, contact us online. We’re here to get you started on making your dream car a reality!