Despite being one of the fastest growing segments in the auto sales industry, there is no official definition for “Buy Here Pay Here”, or “BHPH”, which often leaves it to be misunderstood. To put it simply, BHPH is when a car loan is obtained directly from the dealer and not a 3rd party, such as a bank or finance company. The payments are made directly to the dealer which has coined the term “in-house” financing.
What is the Difference Between "We Finance", "On The Lot Financing", and "Buy Here Pay Here"?
The short answer? There is no difference. Many dealers use these three terms interchangeably. Unfortunately, this is the part that has created so many BHPH myths. Many dealers place these signs in their lot in hopes to attract customers with credit challenges with no intentions of ever offering a true BHPH experience. Instead, they exploit these interchangeable terms in hopes of getting a credit application and having a bank offer credit as opposed to offering the credit themselves. At this point, it’s possible to have sent your credit application to ten different lenders which pulled your credit ten different times. For those with bad credit, this rarely ever works and often puts customers in even worse situations. If you’ve had credit challenges and need a car, a true BHPH experience may be right for you, which is exactly what we offer here at AutoMax.
Who Should Go To a BHPH Dealership
A BHPH dealership is great for first time buyers and buyers with low credit scores. BHPH dealerships are primarily designed for shoppers who may have experienced financial bumps and bruises. If you are a first time buyer, have low or bad credit, or if you have had trouble getting an auto loan, a BHPH dealership should be one of the places you visit during a car search.
What's The Difference Between a BHPH Dealership and a Traditional Dealership
The only difference here is the customer’s shopping experience. At a traditional dealership, the financial conversation is often the last part of your experience. After you've seen a few models, asked a host of car questions, and possibly test driven one, the dealer will help you explore payment options. At a BHPH dealership, the process is usually reversed. The dealer will ask you a series of questions, possibly run a credit report, and invest in understanding your credit history before showing you available cars. Finally, with your monthly payment range and down payment information factored, you will be shown cars that are right for you and your unique financial situation.
Can a BHPH Dealership Help Establish, or Even Rebuild Your Credit
How can you build or rebuild your credit if you can’t obtain credit? While it can seem like a vicious cycle and huge hurdle for many people with no credit, little credit, or even damaged credit, there are ways around it! A BHPH dealership like AutoMax, reports to the credit bureaus, which not only provides its customers with the transportation they need to live, but can also help them establish credit or rebuild damaged credit. A car retail installment loan is one of the best and fastest ways to improve a credit rating.
How and Where Do You Make BHPH Car Payments
Traditional car loans require you to make payments to the bank or financial institution from which you obtained the loan. With BHPH, you may be asked to make weekly or bi-weekly payments directly to the dealership. Typically BHPH dealers arrange your payments to correspond with your “pay day”, which is designed to set up both the customer and dealer for a successful loan experience. It’s always wise to check which payment methods are accepted by the BHPH dealer, as some only accept traditional mail or in-store payments. Here at AutoMax, we understand that life can get busy and your time is valuable. We’ve taken steps to provide several payment options and avenues for the convenience of our customers including:
Automatic Debit Card
Automatic ACH (autodraft)
Online Payment Portal
Automax's Recall Policy
Vehicle manufacturers have not authorized Automax to complete recall repairs and close out recalls. The current recall system is based on manufacturer’s relationship with its franchise dealers and registered owners. Before you purchase a vehicle from Automax, your Sales Associate will review with you a Vehicle History report and a VIN-specific recall report from the Carfax website. Automax notifies customers prior to purchasing to have open recalls fixed by the manufacturer as soon as possible.
Register your vehicle with the manufacturer as soon as you make a purchase. The details for registration vary by manufacturer, but you will usually need your address, date of purchase, VIN and the year, make and model of your vehicle. By registering, you will receive information on open recalls, as well as other important information, directly from the manufacturer. You also will be listed with the manufacturer as the current owner if a new recall is issued. Please refer to www.safercar.gov, carfax.com and www.recalls.gov for additional recall information.