Bad credit preventing you from getting a new car? Most banks and lenders base their approval decisions on your FICO score. If your score is below a predetermined number, they could reject your application without a second thought.
Buy here pay here dealers, on the other hand, don’t even check your credit. They make all credit decisions on-site, so they can accommodate a wider range of customers. Typically, their primary approval criteria is income: if you have the income, they will typically approve you for financing. That’s why a lot of them use the phrase: “your job is your credit.”
How Does BHPH Differ from a Normal Dealership?
Buying a car from a BHPH dealer is a wholly different experience, and not typically a better one. Since the loan comes straight from the dealership, you’ll be sending your payments directly to the dealer, not to an off-site bank or lender. In many cases, you will have to make these payments weekly, in cash at the dealer. These dealers tend to focus on your monthly payment amount, not your interest rate, because the rates they charge are so often, often in the neighborhood of 20% APR.
Do You Have to Put Money Down at a BHPH Dealer?
Yes, definitely. Because buy here pay here dealers overlook all types of credit problems, they ordinarily require big down payments. This is a high-risk type of financing, so a down payment safeguards the dealer if the borrower defaults on his or her payments. In many instances, the down payment covers the dealer’s initial investment in the vehicle, which seems almost illegal but isn’t.
Contractual Fine Print and Repossession
Repossession is common among people with bad credit, and avoiding it starts before you ever sign your contract. It’s critical to choose a vehicle that has payments you can easily afford. Always make your payments when they’re due, and know your dealer’s policy when it comes to missed payments and repossession. Sometimes the dealer can repossess the vehicle after a single missed payment, and often your vehicle will be installed with a GPS tracking device to aid the recovery team in locating and repossessing it.
Alternatives to Texas Buy Here Pay Here Car Lots
Don’t waste your time searching for a buy here pay here dealer in your neighborhood. There’s a far better way to get approved for financing, even if you have bad credit. We get you approved for financing with no fees and no hassles. It takes less than three minutes to submit an application, and there are no costs or obligations. The dealers and lenders in our network do report to the credit bureaus, meaning you will be able to boost your credit score through financing. You could be getting behind the wheel of your new vehicle before you know it.
There isn’t a minimum credit score to submit an application. That being said, you will need a minimum income of $1500 per month or $375 a week. That’s gross income, pre-tax, as opposed to what you actually take home. If you make less than $375 per week, and you don’t anyone to cosign, it is better to save up for a low-priced used car.