There are many routes you can take when purchasing a car, each with its own advantages and disadvantages. A popular method of getting a vehicle is through buy here pay here car dealerships.
These dealerships are such a popular choice because they offer people with no credit or bad credit the opportunity to get a vehicle. Other types of car sellers don’t work with people who have a poor credit rating.
But how can you make sure you’re getting a great deal on your used vehicle if you choose this route? Continue reading to learn seven pro tips to buying from buy here pay here car dealerships.
1. Choose a Dealership That Reports Your Payments
You might assume your car loan payments are being automatically reported to the major credit bureaus. But this isn’t always the case with buy here pay here car dealerships. Some report your payments, while others don’t, so you need to ask.
It’s best to go with a dealership that’s going to report your payments. If made on time, these payments can help boost your credit rating. But be mindful this also means missing payments could lower your credit score.
2. Get Your Car Independently Inspected
Since buy here pay here car dealerships sell used cars, there may be issues with some (or all) of the vehicles on the lot. Some of these issues may not be a big deal, but others could be serious problems down the line.
This isn’t to say the dealership will intentionally be selling you a lemon. Sometimes there own mechanics didn’t catch problems that came with trade-ins. Whatever the reason, it’s essential to have the vehicle checked by an independent mechanic.
What if the dealership won’t allow you to have a mechanic of your choosing look over the vehicle? Consider this a red flag and take your business elsewhere.
3. Keep Your Monthly Payments Below What You Can Afford
It can be tempting to get a vehicle that will max out the payments you’re told you can afford. But avoid this because it’ll leave your finances stretched. Instead, aim to go a little lower than the maximum monthly payment amount you could afford.
Let’s say the dealership says you can afford $400 a month in car payments. Aim to find a vehicle that will keep your payments between $300 and $350 a month.
The other $50 to $100 can be put into an emergency fund for regular vehicle maintenance and repairs. When buying a used car, it’s essential to keep up on things like oil changes and spark plugs. It’s also important to understand that something will eventually need repairs, even if it’s small.
4. Ask Whether Tracking Devices Are Installed
Something many people aren’t aware of is that buy here pay here car dealerships often place tracking devices inside the vehicles they sell. These devices aren’t removable and are used by as many as two-thirds of all these car dealerships.
The reason behind the tracking devices is simple. Since most people using these dealerships have bad credit, they’re considered a higher risk versus those with a good credit score. The tracking device ensures the dealership can locate the car if you stop making payments, and they need to repossess it.
Some people don’t want to give up their privacy like this. They don’t want the dealership to be able to track them and consider this a deal-breaker. Whether or not this is the case for you, be sure to ask, so you know what to expect.
5. Ask About Your Payment Options
Before settling on a specific dealership, you want to understand your payment options. Some buy here pay here car dealerships will require you to make in-person payments on a weekly or bi-weekly basis. This can get old quickly because of how tedious and inconvenient it is.
Other dealerships will have flexible payment options. Some buy here pay here lots will have it set up so you can either mail in your check or make payments online and over the phone. They may also offer monthly payments versus weekly or bi-weekly.
If flexible payment options are a deal-breaker for you, make sure you understand what you’re getting into before signing a contract. Once that contract is signed, there’s no going back because you’re unhappy.
6. Consider Paying Cash
Buy here pay here car dealerships are selling used cars, not brand new ones. This means the price on the vehicles in the lot is a lot less than the $30,000+ price tags you can find on brand new cars. You can even find vehicles priced below $5,000.
Keep in mind the cheapest vehicles on the lot will also be more likely to have problems. They’re also likely to have higher miles on the engine. Depending on your situation, this may be a fair trade-off for getting rid of monthly payments.
No monthly payment on a car loan means there’s no risk of defaulting and having your vehicle repossessed. During tax season, many people can pair their tax refunds with their car savings to come up with $10,000. You could pay cash for a decent used vehicle at this price.
7. Consider Trading in Your Old Vehicle
Whether you choose to pay cash or get financing, you’ll want to consider trading in your old vehicle. Most buy here pay here car dealerships accept trade-ins as long as they run. Why?
The dealership will take your old vehicle and resell it. They’ll likely invest a little time and a small amount of funding on it first. The dealership will offer you a price for your used vehicle since trade-ins keep the lot filled with new inventory on a rotating basis.
That price can be used towards a down payment for financed vehicles or against the cost of a cash sale. Even receiving $500 for your trade-in could make a substantial difference in the total amount of funds you have on hand for your new vehicle.
Do You Want More Pro Tips to Buying From Buy Here Pay Here Car Dealerships?
Many people choose to purchase from buy here pay here dealerships because they accept people with bad credit or no credit. To ensure you get a good deal no matter your credit rating, you can use the seven pro tips listed above.
Do you want more pro tips to buying from buy here pay here car dealerships? Or do you want to look at our current inventory?