It’s important to understand that the industry and buy here, pay here is regulated by the state, meaning there’s a cap on the interest rate which is determined by the state. In states where interest rate is higher, there’s actually little incentive for a dealership to have a high business rate because simply, people would not shop at those dealerships. Generally speaking, most states cap the interest rate around 28% and 29%. While this seems high, it’s a high risk transaction for dealerships and their future in business. Buy here, pay here dealerships operate lending their own money for what are often high-risk transactions. To help curtail sharp differences in rates, AutoMax offers all buyers the same interest rate.
If you really break this down to basic economics, this tactic makes no sense. As a family-owned business operating for over two decades in the North Carolina community, our business is based on trust within our community and trust among our neighbors. Before any vehicle goes on the lot for sale, our team of technicians inspects and makes any necessary adjustments to insure we’re putting our customers in the best possible operating vehicles. For over 25 years we have stood behind our vehicles because it is our livelihood and our family reputation in the community. Every car that hits the lot comes with a warranty and coverage up to 12 months or 15,000 miles. On average, a person drives 12,000 miles each year. Our testimonials page is a good resource to see this lasting trust first-hand.
Buy here, pay here dealerships are regulated just as any other dealership. What that means for AutoMax specifically is that we report and follow the same laws and regulations as any dealer in North Carolina. In fact, due to these regulations and laws, we regularly train our team to ensure we’re keeping up to date. Here are just a few of the laws and regulations:
State & Federal Unfair & Deceptive Practices laws - Consumer protection law that prohibits deceptive practices in each state, which prohibit unfair or unconscionable practices. These statutes provide a solid protection for consumers.
State Usury laws - These laws vary state-by-state but they represent a cap on interest rates that can be charged on a line of credit or loan. While each state dictates their maximum limit, most U.S. states have a version of this law implemented, which includes North Carolina.
The Truth in Lending Act - A federal law that promotes an informed use of consumer credit which requires disclosures regarding terms and costs. The act is an effort to standardize how costs associated with borrowing are disclosed and calculated.
The Used Car Rule - Most car dealerships who sell used vehicles must comply with this law regulated by the Federal Trade Commission. There must be a document which discloses important purchasing and warranty information for the consumer through a Buyers Guide.
The Safeguards Rule - Financial institutions are obligated to protect any consumer information collected.
The Red Flags Rule - Another law created by the Federal Trade Commission and the National Credit Union Administration, this rule was set in place to help prevent identity theft.
Financial institutions can and do add late fees, may accelerate contracts and sometimes repossess vehicles due to delinquent payments or defaults on the contract. However, at AutoMax each account is assigned a designated member of our team to act as account representative. What that means is buyers have direct access to members of our team throughout the loan and repayment process and we’re always here to help.
Churning, as it’s called, is the practice of repossessing cars and quickly reselling them a number of times which some dealerships still do. However, it’s not standard industry practice or common among all buy here, pay here dealerships. Our goal at AutoMax is not to ‘get rich quick’ but to help each customer find a vehicle and pay off their auto loan in a timely manner. Repossession is a last resort and we have many layers in place to assist our customers through the repayment process. In fact, we lose money when a vehicle is repossessed and the value of the vehicle goes down with every sale and every new owner.
The AutoMax buy here, pay here car lots credibility and attention to customer satisfaction has been proven time and again through our interaction as well as our many systems set in place to help our customers purchase vehicles they can afford.
Since 1989, AutoMax has been a family-owned car dealership in North Carolina serving areas from Wake, Franklin and Durham to Orange, Halifax, Warren, Vance counties and beyond. While much has changed within the industry since our founding, AutoMax has been offering not only affordable used vehicles on our car lots, but we’ve been offering peace of mind through our company’s roots and employees who live and work in the area. While on to our second generation of owners, our mission as a buy here, pay here dealership continues to provide reliable vehicles and credit to our friends, family and neighbors like you. What that means is offering no credit or bad credit car loans to individuals with prior credit challenges while working with them to help them build on that credit. We set in place financing terms and plans for all of our buyers and our on-site team of account specialist work with you through the entire process to help you find what you want and can afford.
AutoMax dealerships of Henderson and Youngsville, NC proudly serve customers from the surrounding communities and are happy to answer any questions and help however we can. Stop by one of our locations!