Buying a Car with No Credit
Having poor credit or no credit at all can be problematic – especially when you’re trying to be approved for an auto loan to buy a car. Cars are essential items needed for day-to-day life. Being unable to purchase a car can be detrimental to your standard of living. Most places, including car dealerships, banks, and apartments, run a credit check before giving you the loan you need for the purchase.
Having credit trouble can force you into debt from the worse-than-average interest on the loans that you are able to get – if you’re able to get them at all. Yes, you can probably use Craigslist to find a second-hand car, including a car that can get you from Point A to Point B, but that option will not help build your credit, and you’ll need to make the complete payment all at once up front. That option will also not give you the peace of mind needed if something goes wrong with your car. That option is not a buy here, pay here dealership – the best way to buy a car with no credit.
So what is a Buy Here, Pay Here Dealership?
A Buy Here, Pay Here (BHPH) dealership is the option you have when it seems there are no options left. A BHPH dealership will help you get into a high quality car if you have bad credit or no credit at all.
How do Buy Here, Pay Here Dealerships work?
Unlike other places that rely on a third party to underwrite your loan, BHPH is an all-in-one stop. BHPH dealerships allow you to buy a car in-house; they do all the financing in-house including extending a loan to you and not turning you away because of your credit.
Buy Here, Pay Here dealerships remove the intermediary and do everything in-house, eliminating the need to pay someone else and saving you some money along the way. They are able to fix an interest rate for you that covers the potential cost of damage, failure of making payments, or repossession.
Now, a higher-than-average interest rate sounds a little bit daunting, as it should. Nevertheless, this is often the only option that many people have left, because having bad credit or no credit at all makes you a big risk to any loan-lending company.
At Buy Here, Pay Here dealerships, the payments are often made at the facility, usually in the form of cash. Checks or money orders often will not be accepted because of the liability and potential risk someone with bad credit or no credit poses. Customers at BHPH dealers will often be put on a bi-weekly pay schedule with designated times to pay off the loan in cash or through automatic payments.
How Does This Benefit You?
Credit can be defined as the ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future. In order to build credit, or that trust, you have to prove that you are reliable, consistent, and dependent. In addition, you cannot build trust if no one lets you try to prove yourself.
In many ways, Buy Here, Pay Here dealerships will be the last opportunity to show you are trustworthy. BHPH dealerships are the only option left because of the service they provide, their legal status and how they must operate. BHPH dealerships must follow and adhere to the same rules and regulations placed on all dealerships. This means that all activity regarding payments on your loans must be reported to credit bureaus.
Reporting that you are making your payments on time and working hard to pay off your debt builds and increases your credit score. That means that in the future, you will have something to your name to be proud of. You will have something that will open up the future for you because you can prove to the world that you are trustworthy. For someone with no credit or bad credit, this is the quick solution you need to build your credit while trying to continue and move forward in your life. For most, this is the dream. Being able to work your way up. A Buy Here, Pay Here dealership can be the push you need to get started on this journey. It can be the push you need to build your credit.
Building up your credit and maintaining good credit can allow you to purchase your home, get a credit card with good rewards, and get an even better car. Buy Here, Pay Here dealerships provide you the comfort that you will always be able to get a car. It may seem like a last resort option, but in reality, it will reduce the headache and stress associated with scrambling from place to place trying to get approved for a loan. BHPH dealerships are the helping hand you are desperately searching for.
Buy Here, Pay Here Dealerships Teach Financial Responsibility
Physically going in-person and developing a relationship with the dealership will (hopefully) prevent you from taking advantage of them. It also ensures that you will not just default on your loan. We can all write a check and pretend as if everything is okay when it is not. Writing a check and having it bounce seems like the easier option than recognizing you may genuinely have a problem with keeping track of your finances. Having to pay in cash will enable you to face the reality of your finances and force you to be more capable and to think about why you have bad credit in the first place. These reasons could vary from spontaneous spending, poor record-keeping, missing payments, and/or bankruptcy.
Whatever the reason may be, knowing that you have to make a payment to someone can be beneficial because it sets them up in a routine and to set aside money specifically on a certain date. This routine is sometimes just what people need to feel more in control of their life.