Buy Here Pay Here
Fine and easy or Dealer Jackpot
Buy Here Pay Here is where the dealer finances the purchase of the car inhouse for the customer and while you may not meet the credit requirements at other places buy here pay here - (BHPH) is very flexible. I would caution you on this as a plan of purchase for a vehicle as there is no incentive for the dealer to offer you a deal of any kind in your favor. When I was in the business I never ever did any BHPH on any of my vehicles, I wanted my money NOW! I did have partners who did do BHPH and I can tell you it was never in the favor of the customer buying the car. Anytime you enter into any type of agreement or contract consider this from BOTH sides "whats in it for me" - WIIFM. I think we can safely say that from the customers side the WIIFM is that they get a car with little credit restrictions and easy terms, but how about the dealer. When I was a kid I said to my mom one day in the supermarket "Can we get this cereal because there is a free toy inside that I want", her reply was that "Son, you do not get something for nothing if you have to pay for the cereal then is the toy really free?" So lets think about the dealer and I will tell you all the secrets I know of about BHPH and how it is typically setup. Most dealers are in the business of turning a profit but only after paying expenses first, also keep in mind that mst BHPH dealers are working with a line of credit or a very small cash account. Here is the process the dealer usually looks for a car that is a deal or a car that was used as a trade-in to sell for BHPH. Thypically the dealer wants what he has tied up in the car for the down payment and his profit is in the installment payments. So if he buys a car from the auction house for $1,200 and sells it for $5,000 than he gets $1,200 down and recives payment on the balance of the $3,800 over a period of time. The problem with this is that the car is generally never going to make it to the term of the loan and than gets repossed by the dealer to resell again. The buyer is upset because they fell the dealer should fix the car is not willing tomake any payments until they do,thus allowing the dealer to repo the car for non-payment. If we analyze the transaction we find that the buyer could have bought a car cash for a little more than what the BHPH place was willing to take as a down payment.
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