Think about this: Your automobile just died, and your credit score looks like it was put through a paper shredder. You need to get another ride right away. What do you do? You undoubtedly have “Buy Here Pay Here” (BHPH) and “Bad Credit Car Dealerships” at the top of your Freedom Auto Sales list. Both promise you a set of keys, even if your FICO score isn’t great. But does one really save you more time or money? Let’s get to work and compare without any sales talk.
First, there’s Buy Here Pay Here, which is like a greasy spoon café for car loans. You and the dealer are the only ones involved. The dealer is in charge of your wallet and takes care of both the sale and the loan. Sounds nice, doesn’t it? There is no bank interference, and you may drive away even if your credit is so awful you don’t want to look at it. What’s the other side? Interest rates often go up to the point where they make your nose bleed. Honestly, the cars might have a longer history than your grandma’s favorite soap series.
Not good credit Car dealerships do things a little differently. They deal with lenders from outside the company, but they mostly help those whose credit is, well, “colorful.” It can take a little more paperwork to get approved, but you might be able to get a lower rate. Sometimes their cars are newer, too, with fewer skeletons in the trunk. Still, rigorous lenders could ask for bigger down payments or shorter loan terms, which can be hard on your budget.
Let’s talk about saving money because no one likes to pay more than they have to. People are drawn to BHPH lots because they can get approved right immediately, but those high interest rates can discreetly take thousands more from your paycheck over the life of the loan. If you miss a payment, dealers can occasionally put in trackers or even remote kill switches. The experience can be cold and swift. Joining this group isn’t fun.
If you can get even a slightly better rate, bad credit dealerships can save you a lot of money in the long run. The problem is getting approved. If your credit isn’t at its lowest, you might be able to get a loan with better terms. The process isn’t always quick, but your future self might thank you for eating that humble pie and filling out the forms.
Here’s a simple question to consider yourself: Would you rather carry a heavy burden up a hill with BHPH interest, or fill out a few extra documents at a bad credit dealership and maybe pay less? Some people think the fee is worth it for the instant car without the trouble. A little patience can go a long way for certain people.
What do you think? The quickest choice (BHPH) can end up costing you a lot of money over time. A dealership with terrible credit could damage your dignity for a day, but it will be better for your bank account over time. No matter what you choose, read the fine print. There are no free rides, but if you work hard, you might be able to save money and avoid feeling bad about your purchase later.