Buy here pay here, also known as in-house financing or BHPH dealerships, offer an alternative car buying process for those with bad credit. These dealerships are able to provide a loan because they act as the lender themselves. While this type of dealership may seem like a great option for credit challenged buyers, it is important to understand the risks involved with these types of loans. In this article, we will discuss what buy here pay here car dealers are, how they work, and some alternatives to consider when purchasing a vehicle. Learn more :

What is to buy now and agree to pay later?

Traditional car dealerships either arrange auto loans through a third-party lender or use an online application that is shopped to multiple lenders. Often, these lenders will verify the applicant’s income and residence to ensure that they qualify for the loan. This is how most traditional dealerships handle auto financing. Unlike this, a buy here pay here dealership will directly finance their customers. Generally, this will require a down payment and have higher interest rates than traditional lenders.

However, because of changes in the used-cars industry, some BHPH dealerships now report on-time payments to the major credit bureaus. This can help a borrower rebuild their credit score and may also allow them to get a lower interest rate in the future. However, if you are having trouble making the monthly payments, you should always contact a bankruptcy attorney to see if filing for bankruptcy is an option for you.