Pros and Cons of “Buy Here Pay Here” Dealerships

If you are in the market for a certified pre-owned vehicle, check out our Used Car Buyer’s Guide first. After setting your budget and deciding whether to buy from a private seller or a dealership, the next step is deciding what kind of dealership to buy from.

What Are “Buy Here Pay Here” Car Lots?

Buy Here Pay Here (BHPH) car lots distinguish themselves from other used car lots because BHPH dealerships offer on-site financing.

If you have bad credit, no credit, or in bankruptcy, you may find BHPH dealerships to be your best option. Even if you have good credit or don’t need financing, BHPH dealerships offer great deals on certified pre-owned vehicles.

While “buy here pay here” financing may be your only way to obtain a vehicle of your own, make sure you do your due diligence and make an educated decision beforehand (See: How to Buy a Used Car on Bad Credit).

Buy Here Pay Here lots have to abide by stricter laws since they are also effectively a finance company. Any BHPH lot that does not follow state and federal rules and regulations will not be in business for very long.

For example, all BHPH dealerships will have to follow the Truth in Lending Act (TILA), which requires the dealer/financier to disclose the final cash price, the amount financed, in addition to other necessary information for the consumer to shop and compare.

Other laws and regulations include the Fair & Accurate Credit Transaction Act, State Usury laws, and the Fair Debt Collections Practices Act.

Buy Here Pay Here Pros

In-House Financing

The first obvious advantage of BHPH dealerships is the ability to purchase and set up loan payments at the same place. Instead of getting an auto loan from a bank or another third party, you’ll be able to get everything done at the dealership.

Your payment plan will either be weekly, semi-monthly, or monthly. Get an idea of what your monthly payment will be using our Auto Loan Calculator.

Often, your BHPH dealer will be able to match up your pay dates with your job to make it as easy as possible to make payments on time and build up your credit score.

If you have no credit, bad credit, or are in post-bankruptcy, getting loan approval can be difficult. While annual percentage rates may depend on your credit score, Auto Simple accepts all credit situations including bad credit and no credit. This can be a great way to build up your credit at the same time.

Don’t believe people who say you’ll be paying 30% interest or the maximum allowed by law. Many BHPH lots offer interest rates in the range of 15% to 20%. Auto Simple offers interest rates as low as 14.9% to qualified buyers.*

Get pre-approved for financing by completing our secure online credit application.

Transaction specifics will be unique to you so make sure you review all the paperwork and finance information before you sign anything.

48-Hour Return Policy

When you buy from a private seller, you give up the chance to return the vehicle if you aren’t satisfied (along with a host of other buyer securities). When you buy a car from a BHPH car lot on the other hand, you are given a short return period to drive and test your purchase.

At Auto Simple, and at many other BHPH lots, a full 48-hour return period comes with every vehicle purchase. Make sure you go over this information with your dealer before signing any papers. No-Return policies raise red flags.

48 hours should give you enough time to drive your new vehicle through a variety of road conditions and even compare it with other cars and deals. There is absolutely no obligation to accept the offer if you are within the 48-hour timeframe.

Trade-In Deals (Buy Here Sell Here)

Trading in a used car is an easy way to kill two birds with one stone. If you are looking to trade in an older vehicle for a newer one, Auto Simple offers top dollar for pre-owned cars, trucks, vans, and SUVs. Our appraisals are good for 7 days.*

By selling (or trading in) your old car at a BHPH dealership, you can save a lot of time and money. We don’t know about other BHPH lots, but at Auto Simple, we make it extremely easy (See: How to Sell a Used Car to a Dealership).

Just fill out this form and we’ll send you an estimated appraisal within 48 hours.*

Curious to know how much money you can save by trading in your gas guzzler for a more fuel efficient vehicle? Calculate your fuel savings with our Gas Savings Calculator.

Free CarFax Report

Another advantage of going with a BHPH dealership is access to free CarFax reports on all vehicles.

Certified Pre-Owned Vehicles and Thorough Inspections

certified pre-owned car is one that has undergone a full inspection and any necessary repairs as specified by the automaker. CPO vehicles are often in “like-new” condition. They may cost more, but often come with additional warranties and roadside assistance (like our 6 Month/6000 Mile Powertrain Warranty), one of the main reasons why it’s a smart idea to buy from a BHPH dealership.

While we can’t speak for other dealerships, the in-house mechanics at Auto Simple put every single vehicle through a 180-point quality inspection. This is the largest inspection any of our mechanics have ever been exposed to. We make sure to fix everything from gaskets to transmissions and everything in between.

We are able to inspect, fix, and test all of the cars on our lot because we have all of our services on-site. We control the quality levels and meticulously recondition the vehicles to ensure we meet, and hopefully exceed, all of your expectations.

Warranties

Most used car dealerships offer warranties on used cars, such as Auto Simple‘s 6 Month/6,000 Mile Powertrain Warranty on All Certified Pre-Owned Vehicles. This comes in addition to any original manufacturer warranties.

Call and ask about warranty information beforehand and make sure you get everything in writing.

Quick and Easy Process

All BHPH vehicles are normally in a database that is connected to the DMV for fast and smooth transactions. BHPH dealers may also be able to work with you to clear any existing loans you may have taken out (this depends on location, lender, and other factors).

Auto Simple makes the car buying process easy. You can get started without even leaving your couch:

  1. Get Pre-Approved Online
  2. Search Online Inventory
  3. We Help You Find the Right Vehicle
  4. Drive It Using Our Private Track for Test Driving
  5. Buy with Confidence (See: Customer Confidence Program)

Although you may have to sign on a dotted line or two, all the paperwork is typically handled by the dealership. Most of our customers are able to drive away in their dream car the very same day.

Buy Here Pay Here Cons

Limited Inventory

Although BHPH lots carry a lot different makes and models, you are restricted to what they have available in their inventory. Shop online inventories and call the location before making the trip.

Higher Interest Rates

If you have good or excellent credit, a different lender will probably provide a lower interest rate than a BHPH financier.

But despite the unreasonably high interest rates you may have heard about BHPH lots, Auto Simple offers interest rates as low as 14.9% to qualified buyers.* Get pre-approved online and contact our financing department for more information.

Wherever you get your loan, make sure you take the information home and carefully look it over before you sign anything. Remember, this contract will potentially stay in effect for years. This isn’t an iTunes update—you want to make sure you know the exact terms and agreements.

We also recommend looking up the dealership online with the Better Business Bureau and any local consumer affairs offices. Check how long they have been in business and online testimonials. Basically, just do your research and you’ll have no problem finding a great car at an affordable price.

Hidden Fees

Not all dealerships are as upfront with you about the total costs involved in your transaction. Don’t assume they will tell you. Look over all of the paperwork carefully and check for:

  • administration and handling fees
  • the price matches the price you agreed to
  • inspection or detailing fees
  • delivery fees

Make sure you know what your payments will be be, how much the interest is, and when the payments end.

Additionally, your BHPH dealership may not report your payment history to the Credit Bureaus.

While most dealers will automatically submit your payment information to credit agencies (like Auto Simple), don’t assume this is being done. Ask the dealership what their policy is on credit reporting so you can start rebuilding your credit.

Conclusion:

Buy Here Pay Here dealerships offer a wide selection of certified pre-owned vehicles and specialize in providing auto loans to people with negative credit. If you need a quality vehicle and need to build up your credit, you can kill two birds with one stone at a BHPH dealership.

Individual perks, however, vary from dealership to dealership. Make sure you do your homework first. Below you will find some of our competitive offerings.

Auto Simple PERKS

Most of the “buy here pay here” advantages listed above can be found at any BHPH dealership. There are, however, many benefits we offer on top of the aforementioned “pros.” If you do end up choosing to buy or sell a used vehicle at a Buy Here Pay Here dealership, we hope you choose one of our locations in Tennessee or our brand-new lot in Dalton, VA.

Here are some of the specific perks we offer to all of our customers:

  • Free CarFax for All Vehicles
  • 6 Month / 6000 Mile Powertrain Warranty
  • Low Down Payments
  • Large Inventory of Certified Pre-Owned Vehicles
  • Thorough 180-Point Quality Inspection
  • Preferred Customer Program
  • Meticulously Reconditioned Vehicles
  • Hassle-Free Financing
  • FREE Conventional Oil Changes Every 90 Days*
  • Short-Term Financing
  • Low-Mileage Vehicles
  • Fast Credit Approval
  • Weekly, Bi-weekly, and Monthly Payments

We take great pride in taking control over the entire buying, selling, inspection, and testing process. All of our vehicles go through a rigorous 180-point quality inspection.

We offer affordable prices and low down payments. Many of our customers drive away in their dream car for as low as $499 down.

Free Oil Changes

Simply sign up for recurring payments from your checking account and get FREE oil changes every 90 days for as long as you are paying off your loan.*

$200 Referral Program

When you refer a friend who purchases a vehicle from Auto Simple, you will earn a $200 credit on your account.

Tax Refund Special

If you bring in your estimated tax refund, you can sign and drive away with your new car and we may defer your down payment.

Our tax refund special makes it easy for you to Sign & Drive. Stop on by one of our locations and say “Hi.” Read our testimonials to get an idea of how we treat our customers.


If you have any questions, don’t hesitate to speak with one of our Online Specialists or give us a call:

Chattanooga, TN – (423) 551-3600

Cleveland, TN – (423) 476-4600

Dayton, TN – (423) 775-4600

Dalton, GA – (423) 775-4600

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