The Top 5 Myths About Buy Here Pay Here Dealerships

Buy here pay here dealerships, or BHPH dealerships used to get a much worse rap than they do today. Now, big-name dealerships like Chevy often offer in-house financing for potential buyers, although that financing is subject to credit approval. That, in itself, is a form of a buy here pay here dealership. However, the myths that surround buy here pay here dealerships often form because of smaller buy here pay here companies.

A huge reason why there is so much fog around the buy here pay here process is the lack of consistency between small dealerships. With worldwide car brands, such as Chevy or Ford, the company asks all dealerships to utilize the same protocols so that there is consistency in customer care. This is a caveat of commercial service, but when it comes to small businesses with two or even just one location, it is impossible to receive the same service as a competing business, as they are separate entities with separate action records.

Even though most can tell one small-town grocery store from another of a different name, there is still the idea that if one buy here pay here dealership does something wrong, it means that all buy here pay here dealerships are terrible. Auto Bank of Kansas City understands that it can be hard to trust an institution after another of the same industry has wronged you, but we want our customers to realize that much of the bad rap that buy here pay here dealerships get comes from randomized occurrences at other dealerships. This is by no means an indicator that Auto Bank of Kansas City will act this way, nor is it an indicator of the field as a whole.

In the spirit of transparency, here are the top five myths we’ve encountered as a buy here pay here dealership and why you shouldn’t believe them.

Let's Take a Look at The Top 5 Buy Here Pay Here Myths

Myth 1: Interest Rates are Too High For Most to Pay Off Comfortably

When people see interest rates higher than their credit cards or student loans, they get wary, and rightfully so. Some buy here pay here dealerships will provide you with payments that focus on exorbitantly high-interest rates. Most buy here pay here lots, however, do not charge too much more than the national average for loan interest rates. Even if the rates are higher than expected, they are as a form of collateral for those who might have poor credit histories. Buy here pay here lots often put a lot of faith in people with poor credit scores, and higher interest rates protects the investment that those lots make in people with poor credit scores.

The good news is that for people with lower credit scores or no credit scores who have no trouble making payments, you can pay off interest and principal quickly and it will increase your credit score. Therefore, for those who do not intend to miss any car payments, working with a buy here pay here dealership can be the first step in improving your credit score.

Myth 2: All Buy Here Pay Here Dealerships are Interested in Repossessing Your Car

The idea of car repossession is rampant through the myths surrounding buy here pay here dealerships, but the truth is all organizations that finance their products can repossess those products if the client does not hold up their end of the bargain. This includes high-end dealerships like BMW and Mercedes-Benz as well as simple buy here pay here dealerships. In truth, it is much less profitable for buy here pay here companies to consistently repossess cars as a way of making money. The dealer wants the customer to buy and keep their car, so they don’t end up with eventually retro and antique vehicles on their lot. People will pay less and less for these down the line. In this way, buy here pay here dealerships like Auto Bank work with their customers to find cars that are in their affordable monthly payment price range and do everything within their power to help that client keep their vehicle.

Finally, if the client is happy, they’ll continue to be clients and will draw in other new clients. It’s impossible to keep ratings up high enough if your company is continually repossessing cars.

Myth 3:Buy Here Pay Here Dealerships Are Not Strictly Regulated and Therefore Can Do Whatever They Want to Their Customers

This is a blatant lie, yet it somehow persists in the car buying community. Not only must buy here pay here lots follow federal laws, which include placing a buyer’s guide on every vehicle we advertise among other laws, but there are also specific laws governing each state. This prevents buy here pay here dealerships from selling customers “lemons” for high prices. Customers who buy from buy here pay here dealerships are always getting transparent deals because for dealerships not to be transparent they must break the law and risk losing their right to sell.

Myth 4: Buy Here Pay Here Lots are Only Interested in Selling Thoroughly Used Cars

Not every car in a buy here pay here lot is a lemon, and if consumers purchase a vehicle that has flaws, it is legally required for dealerships to list those flaws. That being said, buy here pay here dealerships are ideal for a range of customers. Lots like Auto Bank KC sell both newer model cars and reliable, old used cars so that our customers have options. Many come into our dealership thinking that they will only be able to afford the ugliest of the very used cars only to find that with our financing options they might be able to afford something a little nicer. It is that variety that reputable dealerships, like ours, strive to provide.

Myth 5: Buy Here Pay Here Lots are Just as Selective About Their Customers as Regular Dealerships

At Auto Bank KC, we live by the phrase “variety is the spice of life.” We believe as much in the second lives of used cars as we do in the capabilities of our range of customers. While our options do vary based on the amount you are willing to spend on a car, we rarely turn customers away because of their credit history. After all, credit history doesn’t always indicate how many bills a customer pays a month or how capable they are at remembering their loan due dates. It just shows certain aspects of their spending habits that mainstream financial institutions see as red flags.

Have more questions or myths to dispel? Visit one of our locations in Kansas City, either at 6901 East Front Street or 2000 E. Truman Road. Alternately, you may visit our site to schedule an appointment to work with us.