The Truths (And Their Explanations) About Buy Here Pay Here Financing
Just as there are people who sing praises for buy here pay here financing, there are also consumers who dwell on the other side of the fence. And unfortunately, it is the facts that we see as potential threats that get registered in our minds easily and we continue to judge a service based on those sides. Buy here pay here financial houses have obvious differences with the conventional banks. Their business models deviate a lot from each other. What people consider as risks regarding BHPH financing is actually their truths of service. The deal you get is an entire package and just because they differ from the traditional, it does not mean that they are inconvenient.
This post discusses a few such truths about buy here pay here financing and gives you the reasons behind them. Take note to judge both sides of the story and make an informed decision.
Truth: BHPH dealers charge more interest
It is true that banks charge a lower interest rate as compared to BHPH dealerships but the banks also turn you away if you have a low credit score which BHPH dealers do not. Owing to the latter’s business in a risky environment, they charge you higher to protect their interests. This should not be an inconvenience for you as the rates are never sky-high and you get an auto loan despite your credit score.
Truth: You may not get the exact loan amount that you want
That is true with conventional financial institutions as well. If you are looking for the best cars in Spartanburg area, it goes without saying that you can always get the best if you can swing the price. But your net loan amount will depend on your current debt to income ratio and other credits present in your portfolio. Good BHPH dealers will only approve that amount that you can manage and pay off, but you can still get quality cars at dealerships with a sizeable inventory.
Truth: The car may cost you more than the general market value
Only if you take a chunk of the car’s price as loan and pay a low-down payment. At any credit institution, a large amount of loan combined with a long span will automatically increase the net sum that you will have to pay back. But if you buy used cars for sale in Spartanburg, South Carolina from trusted BHPH dealerships, you can opt for their flexible payment options where you can reduce your loan amount by paying a high down payment upfront.