For consumers with problem credit there are a number of advantages to getting a car loan from a BHPH car lot including the ability to get an auto loan with a repossession showing on their credit reports
Understanding credit problems
Here at Auto Credit Express we've spent the past decade helping car buyers with bad credit looking for online car loans find those new car dealers that can offer them their best opportunities for auto loan approvals.
But we also realize that everyone's situation is different and that it's important that consumers understand the different kinds of higher risk auto lenders. This is especially true for those applicants with questionable credit that ask, “how hard is it to get a car loan with a repo?”
BHPH car dealers
For those unfamiliar with what the phrase "buy here pay here" means, it refers to a car dealer where you can not only purchase a car, but a dealership where you can finance it, right there, as well. In this case financing is arranged with money that is borrowed from the dealer instead of a bank, credit union or finance company.
Many people in the market for a used car - especially if they have very poor credit – start the buying process by visiting one of these dealers, thinking there is no choice other than signing up for a buy now pay later car loan.
These buyers believe that because of their poor FICO scores, no regular car dealer will be able to get them approved for a loan. The fact is that in many cases, this may be true.
Low income, short job time, no credit history, multiple repossessions
For those consumers that have a low income, say $1000 per month, a short time on the job – maybe 3 weeks – and no credit history, the chances of getting financed at a regular dealership – even one that offers auto loans from higher-risk auto lenders - are pretty slim.
Multiple repossessions or a single repossession from a subprime lender are two additional situations that are also often deal killers for even the lowest tier of finance companies.
So for these customers a BHPH car lot really may be the only way that they can finance a vehicle.
But many car buyers who think that a "buy here pay here" arrangement is their only option may be pleasantly surprised at the number of additional opportunities for car finance that they really have – but more on that later.
BHPH pros and cons
The biggest attraction BHPH car lots have is the fact that they don't require credit checks. But this also means that even if buyers make every payment on time, repaying this type of loan will not improve their credit since most of these dealers don't report loans or good payment records to the credit bureaus (in many cases they will report repossessions and, in some instances, poor payment histories to the bureaus).
This means that, for the most part, even after successfully completing a loan these buyers will find themselves in the same credit situation the next time they need a vehicle.
The Bottom Line
For some consumers the only choice for getting a car loan with a repo is going to be a BHPH dealer.
But for others there are dealers that work with a wide array of lenders to maximize the chances for a loan approval. These loans require a credit check, but once approved, each car payment made brings consumers one step closer to rebuilding their credit scores and reestablishing their financial future.
So if you need a car and think that your only option is a "buy here pay here" dealer, we want you to know that Auto Credit Express specializes in helping applicants with car credit issues find dealers that can give them their best chances at approved auto loans.
So if you're ready to reestablish your auto credit, you can begin now by filling out our online auto loan application.