Are “Buy Here, Pay Here” Dealerships for You?

Having weak credit can make finding a good auto loan difficult. Banks and other financial institutions have large checklists of requirements that must be met on top of having a great credit score. Thankfully there are other options. 


"Buy here, pay here" (BHPH) dealerships are a great way to get the auto loans you need –especially if you are in a tight spot. 


What are "Buy here, pay here" Dealerships?


Normally when you want to start the car buying process, you first have to get a car loan from a lender. Only after getting approved and going through a mountain of paperwork will you finally get the auto loan you need to start the shopping process. 

With BHPH dealers, you can skip all that. Basically, they are the one-stop-shop for car buying. By cutting out the middlemen, these car dealers allow you to take out a loan right then and there, so you don't have to go through any additional steps. 


It's important to note that because they are more willing to work with consumers with poor credit histories, there might be some additional costs and requirements involved in the process, which may come in the form of higher down payments and a more limited selection of cars. 


What are the Other Advantages of Using BHPH Dealers?


Aside from the overall convenience, many BHPH dealers have a lot of experience working with consumers who have bad credit. It's no problem if you don't have an amazing credit score. Many BHPH dealers will look at other ways of measuring your creditworthiness - such as your alternative credit score.


What is an Alternative Credit Score?


This is a question we get all the time at Connect. To put it simply, alternative credit scores track information associated with regular expenses such as phone, internet, utility bills, or even subscription services. This score will give you a higher chance of getting a better loan.


Now you may think, "Why would a dealership accept an alternative credit score?" But federal law is on your side. According to the Equal Opportunity Act (ECOA), if you provide a lender with proof of nontraditional payment history (that's what an alternative credit score is), they need to consider it in making a lending decision. 


This rule also applies to all forms of lenders. Whether you are considering using BHPH dealers or looking at other options in your area, be sure not to leave this important negotiating tool out of the conversation. 


Sign up for Connect today and get your alternative score 100% for free. You will also get the benefit of our other services, which will help you manage and organize your bills and accounts - including your finances, utilities, rent/mortgage, insurance, travel rewards, subscriptions, and more.

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