Table of Contents

    Buy-Here, Pay-Here Financing - Everything You Need To Know

    If you find that all other options for financing a car are closed off to you, a Buy Here Pay Here (BHPH) dealer can be the last resort.

    This is a good option, especially when you don’t have a stellar credit score and traditional lenders aren’t approving your loan applications.

    Keep reading to learn more about BHPH dealers.

    How BHPH Works?

    If you purchase and finance a car at a dealership, the dealer will usually transfer your details to a network of lenders.

    Once approved, you’ll be making monthly repayments to the dealership.

    These dealerships are a one-stop-shop for buyers as they sell and finance cars.

    When you plan to get a car from the Buy Here Pay Here dealership, you’ll be asked to provide proof of income, proof of residence, and a few other details.

    However, the best thing is that these dealerships don’t necessarily need your credit score.

    Based on the documentation provided, the dealer will approve an amount and then show you the cars within that price range.

    The Advantages

    Here are some advantages of financing your car from a Buy Here Pay Here dealership:

    • Low Credit Scores Accepted - Most BHPH dealers accept applications from buyers with no credit score or bad credit scores. 
    • Less Down Payment - Most of these dealers don’t need a huge down payment. In some cases, you can even get a car without any down payment or for a payment of $500 or less.
    • Easy Process - The entire process is time-saving, effortless, and straightforward as you can buy a car and get it financed at the same destination.

    The Drawbacks

    While it’s comparatively easy to get approved for a loan at BHPH dealerships, there are quite a few disadvantages to it:

    • Expensive Financing - When it comes to the rate of interest, fees, and associated charges, BHPH loans can drive you on the backfoot. Usually, the interest rates on these loans are around 20% which is significantly higher than what you can potentially access from credit unions and banks. This increases your chances of going upside down on the loan.
    • It Doesn’t Help A Credit Score -  BHPH loan dealerships don’t always report these payments to one or more credit reporting bureaus. Hence, even if you keep making timely payments, chances are that your credit score will see no improvement.
    • Tracking Devices Might Be Installed - It’s said that more than two-thirds of BHPH dealers install tracking devices in cars they sell. Since these loans are high-risk and are offered to borrowers with low credit scores, dealers want to ensure that they can easily repossess the vehicle in case of delinquency.

    Vehicles At BHPH Dealerships

    BHPH dealers offer a wide variety of pre-owned cars and automotive loans for negative credit users.

    However, individual benefits vary from dealer to dealer.

    Most cars are pre-owned and available at extremely low prices. Here are a few of the in-demand cars:

    • 2011 Audi A5 - The vehicle report is auto-verified by Experian. It’s a feature-laden vehicle with a sale price of $9,995.
    • 2007 Hummer H3 -  Driven a total of 164k miles, this vehicle ranges around $6,500 with affordable payment options.
    • 2013 Infiniti QX56 - With a total of 103k miles, this car is priced at around $17,995. It’s one of the largest SUVs capable of accomodating 7 passengers.
    • 2016 Infiniti QX60 - Driven just around 46k miles, this is the newer version of Infiniti SUV. It’s priced at $19,995.
    • 2015 BMW 528i - Driven around 115k miles, this four-cylinder beast is economically priced at $12,500.

    Top Alternative: A Subprime Auto Loan

    The subprime auto loan business is a booming industry across the United States.

    Other than BHPH loans, the next available option to finance a car with a low credit score is a subprime auto loan.

    However, keep in mind that this is a high-rate loan.

    • Compared to a BHPH loan, a subprime loan will help you build your credit score when you make timely payments. This loan is offered to borrowers who have a credit score of 600 or less. The money can be used to purchase new as well as used cars.
    • The interest rate hovers around 20%. It’s a good idea to compare quotes from multiple lenders. This will help you to figure out the best rates and lowest fees.


    You can easily get a BHPH loan even with a low score.

    However, keep in mind that the interest and fees will be high, and you’ll likely end up paying more than the car’s worth over the life of the loan. 

    Before you visit a dealership, make sure to check out other alternative options, compare multiple quotes and terms across dealers, and review every aspect to secure the best deal.