Buy here pay here dealerships are a type of car lot that sells and finances cars. The consumer can make weekly or bi-weekly payments and must provide a down payment. These dealerships often require cash or a check to make the payment. Although they offer competitive interest rates, the car may not be financed if the buyer has poor credit.
Buy-here, pay-here financing: What you need to know
The downside to these types of car lots is that the monthly payments will be high. Even if you make on-time payments, the dealer may not report your payment history to credit bureaus. This can prevent you from building credit. In this case, you may want to consider alternatives. This way, you can still make a payment that will improve your credit score.
Some buy here pay here dealerships will install a tracking device on your car. This allows them to repossess your vehicle if you fall behind on your payments. Some even disable your vehicle if you miss a payment. In addition, some require you to sign a document agreeing to the tracking device.
Another downside of BHPH dealerships is that they may require a large down payment. This can limit the number of cars you can choose from. You may also have to pay more upfront for a BHPH car if you have bad credit.