There are numerous misconceptions about Buy Here Pay Here dealers or dealerships. The most common misconception is paying out more than what was talked about. Busting these misnomers and myths will help you see the advantages of BHPH.
It is easy to be misinformed nowadays, but what better place to let you in on BHPH than us! To start, buying a car is a very big decision to make. So, before purchasing a car, there are some things you have to consider such as finances or payment plans. Although there is a certain way that BHPH dealers function, there are also some very common misconceptions about them as well. Therefore, before second guessing whether or not you should find a BHPH dealership to get your car, read this first.
1. BHPH dealerships are not regulated.
This makes it top one on the list as many think that this is how everything is. They think the BHPH is an unregulated industry. However, the BHPH dealers can only operate with significant laws and regulations binded to them. The regulations that BHPH dealers have to deal with are both on the federal and state level. This is very similar to traditional dealerships. BHPH dealers actually help you by protecting you on several aspects. They ensure operational ethics and quality of a consumer’s purchase, amongst many others.
If you don’t believe it, just check out the following: Truth in Lending Act; State Usury Laws; Deceptive and Unfair Practices Laws; User Car Rule; Safeguards Rule; Fair Debt Collections Practices Act. These are just a few of the regulations the BHPH dealers in which they operate.
2. BHPH charge sky high interest rates.
Finance and lending generally institutes higher interest rates to those with bad credit. The BHPH industry isn’t the only industry that does this. Think of it like the bank. However, unlike banks, the BHPH dealers charging with sky high interest rates is simply not true. Some believe that they will be charged 30 percent APR or higher by BHPH dealers. Contrary to this belief, most BHPH dealers usually only charge 10 or 20 percent APR. Of course this number depends on factors, but it focuses primarily on the purchaser’s credit. Furthermore, if you have any questions, you should be able to as this will be an agreement both parties should have.
3. Banks do not charge late fees but BHPH lots do.
Although many people think that BHPH lots or dealers will impose additional charges as well as repossessions for late payments, this is actually very far from the truth. While some BHPH dealerships do implement rules similar to this, it is not entirely true for all BHPH dealers. In fact, BHPH do charge late fees, but they are significantly smaller compared to other lending companies. In this case, the bank. The only way to know whether or not your BHPH dealer charges “an excessive amount” is to ask.
4. There is no guaranteed warranty.
There have been plenty of people talking about cars they purchased at BHPH lots that do not have warranty guarantees. This makes potential buyers afraid to purchase cars at BHPH dealerships since they will not have protection. However, at Woodville Auto Finance, we do offer a nice warranty. Although you do have to be wary of other BHPH dealerships, they may sell your loan off to a bank to will definitely burn a hole in your pocket. Added to this misconception is BHPH dealerships sell junk. Low quality vehicles that may breakdown is not something in our repertoire. Woodville Auto Finance is invested in customers and providing them with a dependable vehicle.
5. The high down payment is how much the BHPH dealer bought the car.
It is a common misconception that dealers always provide customers with high down payments. Furthermore, these high down payments are believed to be the price that the cars were bought in the first place. This is, again, very far from the truth. In Woodville Auto Finance, down payment starts at $700. Most BHPH dealers offer something that will fit anyone’s budget. Although the selection of cars may not be a lot, these cars are good and running. Furthermore, they are budget-friendly. This why it is important that BHPH dealers talk to customers and create a payment plan before approval.
6. Inventory shortages and issues causes repossession.
Many BHPH dealerships’ goal is to help each customer reach the end of their loan and get everything paid off. Furthermore, they understand that working with a customer, who is willing to work together with the dealership, is more important than getting vehicles repossessed as quickly as possible. Although repossession does happen, it doesn’t happen to every deal made. It is actually the last option the dealer has to make, and this is usually done due to delinquent payers. Many believe that their cars get repossessed because BHPH dealerships do not have a lot of cars in their inventory. However, as discussed, it is not the case.