Yes, you can buy a car from a buy here pay here (BHPH) dealership with bad credit. In fact, in some cases, this is often a good course if you have already been turned down for a car loan. BHPH dealers can usually get you into a vehicle, but there are big differences in the process.
BHPH and bad credit dealers
BHPH dealers are internal financiers and they are both dealers and lenders. This is convenient for borrowers with bad credit since you don’t have to wait for approval from a third-party lender. This means that you may be able to get in and out with a vehicle even if you have little or no credit.
However, since internal funders may not check your credit score or reports, you may find that you are facing higher interest rates and a larger down payment requirement than you are. you might find with other lenders.
BHPH dealers also check your income level and usually have similar guidelines as subprime lenders. Subprime lenders charge a minimum of $ 1,500 to $ 2,500 for a single job, backed by computer-generated check stubs. BHPH resellers, on the other hand, usually have a minimum income requirement but aren’t always specific about how many jobs you have or how you prove your income.
Subprime lender options
If you are struggling with credit issues, another option to consider besides a BHPH lot is a subprime lender. These are third party lenders registered with special financing dealers. They are willing to work with a wide variety of borrowers because they don’t just limit your credit score to helping you qualify for financing.
A bonus that you might find with a subprime lender that you usually don’t find with BHPH dealers is credit repair. Subprime lenders check your credit and also report all your payments to the major credit bureaus. Payment history is the most important factor contributing to your credit score, so the more you pay your bills on time, the better.
When working with a subprime lender, you may find that you are only required to have a minimum down payment of $ 1,000 or 10% of the vehicle’s sale price. BHPH dealers often require a down payment of around 20%.
You do not know where to start ?
If you don’t know where to start your auto loan search, your first step should be to check your credit score and your reports. You can view your credit reports for free from the three national credit bureaus – TransUnion, Experian and Equifax – by visiting www.annualcreditreport.com. You can get a free copy of every credit report every week until April 2022.
Bad credit is generally considered a credit score of 670 or less. Although different lenders have different score ranges that they use to qualify you for financing, this is usually the line between good and bad credit. If you have bad credit, your options aren’t limited to BHPH dealerships that only sell used cars. You may be able to finance with subprime lenders or even captive lenders of certain car manufacturers depending on your situation.
Rather than trying to find the right lender yourself, let us guide you. TO Auto Express Credit, we want to make it easier for you to find an auto loan. Simply complete our quick and free auto loan application form and we’ll get to work connecting you with a dealership in your area.