Many myths have been created about Buy Here Pay Here car dealerships. To clear up some of the false information on the internet about these dealerships, we have compiled a list of myths and the truth about Buy Here-Pay Here dealerships.
Myth #1: Buy Here-Pay Here car dealerships can add random fees or repossess your vehicle at any moment, for any reason.
People claim that if you have any sort of inconvenience with the dealership, they will repossess your vehicle or charge you extra fees. This is only partially true. The true part is that if you do not pay past a certain date as decided in your contract, you may have to pay a late fee. This late fee is not just a random amount that is unforeseen, it should be very apparent and found clearly in a legally binding contract between you and dealership. Almost every financial institution or car dealership you go through will add late fees as well, there is basically no way to avoid them, except paying on time. When it comes to vehicles being repossessed, if a customer begins to go against the contract consistently, the dealership has a right to reprocess the vehicle. Car dealerships will never add random fees for no reason unless you have broken a contract agreement.
Myth #2: The Buy Here-Pay Here auto industry is not regulated.
Any business has some regulations for the most part and car dealerships have many regulations. Some regulations that must be complied with include the States & Federal Unfair & Deceptive Practices Laws, The Red Flags Rule, The Used Car Rule, The Truth in Lending and many more. Almost all BHPH businesses report their payment reports to credit bureaus. As with any industry there will always be a few businesses that practice illegal and deceptive strategies, which end up making the whole industry look bad. When looking for a reliable BHPH dealership, always be sure to look at the reviews.
Myth #3: BHPH Dealerships love to “Churn” cars.
they can sell it again as many times as possible. But most reputable Buy Here Pay Here dealers have a goal to work with a customer to make sure that the customer stays in the vehicle if at all possible. Most dealers love working with customers who are trying and willing to work to make the agreed upon payments. It’s no longer common for a repossession to be the first option and it is now used as the last option when all other remedies have failed.
Myth #4: Buy Here-Pay Here car dealerships get a down payment equal to what they have in the car.
When Buy Here Pay Here was first established in the 1950s, the typical used car dealership that wanted to try their hand at BHPH would attempt to get a down payment from the customer equal to the cash value they had in the vehicle. These days, with the increase in wholesale prices for all used car dealerships, this just isn’t the case. In fact, down payments on average have gone DOWN in the BHPH industry over the last 10-20 years. BHPH dealers have been forced to continually adapt to be able to help their customers afford not only the down payment, but also the monthly payments. The flexibility of the BHPH dealers is what gives them the ability to offer a quality used car, truck, van or SUV to a customer with bad credit, no credit or even recent bankruptcy.