Consumer Car Buying Advice Blog

Knowing the difference between a traditional dealer that offers terrible credit auto loans and a tote the note dealer can mean either moving on with credit repair or remaining where you are

Your credit repair

Many people with bad credit believe that there is no difference between a buy here pay here dealer and one that offers poor credit car loans.

We’ve know this is true because for the past nineteen years we’ve worked in bad credit auto sales here at Auto Credit Express.

The web site we created also covers the bad credit auto loan process along with the issues that often lead to repossession while showing how some loans can actually improve credit scores – something we’ll be discussing further today.

Buy here pay here dealers

When you visit a buy here pay here dealer, you arrange a car loan and make payments right at the dealership. You do this because financing is arranged with the dealer instead of a third party, such as a bank or credit union.

Although some tote the note car dealerships will accept weekly or bi-weekly payments either by phone or online, most of them require that you physically bring your payments to their location.

Differences

In some ways, there’s not much difference between buy here pay here and traditional car dealers. In fact, a growing number of franchised new car dealers have begun to offer services normally associated with tote the note car dealerships. You might not see “Buy Here Pay Here” printed on their billboards, but phrases such as “We Finance” may tell you that they offer this option.

The biggest difference between these is in the shopping experience. At a traditional new car dealership, the discussion about financing occurs once you’ve picked out your vehicle. At that time, the finance manager will help you explore your payment options.

At tote the note car dealerships, the process is usually reversed. First, your credit situation will be discussed. Once the salesperson understands your current credit situation, you’ll then be shown the cars that fit your credit profile.

The pros and cons of tote the note dealers

Advantages

1. Available cars and available credit

The most important benefit of buy here pay here car dealerships is that they give most bad credit buyers the opportunity to get transportation. In some cases, these dealerships aren’t just an option — they may be the only choice if your credit is really bad.

2. Trade-in flexibility

Tote the note dealers also are usually more flexible when it comes to accepting trade-ins on older cars. That’s because these dealers have traditionally gotten long-term use out of cars that a typical new car dealer will not accept. Since they’re more likely to find a buyer for an older vehicle they’re more likely to consider one as part of a down payment.

Disadvantages

1. The biggest – very little chance of establishing your car credit or improving your credit scores.

One of the best ways to rebuild auto credit is to make timely payments on a car loan. But at tote the note car dealerships, even if you make all your payments on time this probably won’t happen since most don’t report loans or payments to the credit bureaus. In addition, a higher percentage of these kinds of loans end in repossession, forcing you to continue the cycle of older cars and high interest rates.

Try something else

Even if your credit score is below a 640 FICO or if you’ve had trouble getting a traditional auto loan, you should only consider a buy here pay here dealer after you’ve explored the option we offer.

At Auto Credit Express we’ve helped thousands of people with poor credit find a dealer that will give them their best chance at establishing their auto credit and getting an approval for a bad credit car.

So if you’re serious about getting your auto credit back on track, you can begin now by filling out our online auto loans application.

Tags: Bad Credit, bad credit auto loans, buy here pay here

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