Buy Here Pay Here Dealers and What Their Grades Show

A buy here pay here dealer is a lot that is also your lender, and in our directory those lots grade about the same as other used lots, so the label alone does not tell you if one is good.

What Buy Here Pay Here Means

At most lots, you pick a car and the dealer sends your loan to a bank or a credit union. At a buy here pay here lot, there is no outside lender. The lot sells you the car and it also holds the loan. You make your payments to the same people who sold you the car.

These lots mostly serve buyers with thin or damaged credit. A bank may say no. The lot says yes, because it sets its own rules. That can be a real lifeline for someone who needs a car to get to work. It can also be a trap if you do not read the deal closely.

How These Lots Grade in Our Directory

376 dealers in our directory use the words buy here pay here in their public listing. Only 324 of them have 20 or more public reviews, which is what it takes to earn a grade. The rest are listed with no grade.

Of the graded ones, 24 percent earn an A and 16 percent get an F. Compare that to independent used lots as a whole. There, 21 percent grade A and 19 percent grade F. The two groups are close.

So the label is not the verdict. Some of these lots have happy buyers who say they got a fair deal and a second chance. Others have a pile of complaints. You have to look at the single lot, not the type of lot. The grading page explains how each grade is set.

The Real Risks of In House Financing

Financing done by the lot works differently than a bank loan. None of this is true of every lot, but these practices are common enough that you should ask about each one.

• Interest rates are often high, much higher than a bank or credit union would charge.
• Payments can be due every week or every two weeks, not once a month.
• Many lots put a tracking device in the car so they can find it.
• Some add a device that can stop the car from starting if a payment is late.
• Repossession can happen fast after a missed payment.
• Some lots do not report your good payments to the credit bureaus, so paying on time may not help your score.

Ask about each of these before you sign. Get the answers in writing. If the lot will not say, that tells you something too.

What to Check Before You Sign

Start with the total price of the car, not the weekly payment. A small payment can hide a big price and a long loan. Ask for the full cost you will pay over the life of the loan, with interest.

• The interest rate and the total amount you will pay.
• How often payments are due and how you can pay.
• What happens if you are a few days late.
• Whether the car has a tracker or a starter cutoff.
• Whether they report payments to the credit bureaus.
• Whether any warranty comes with the car, and what it covers.

Read the one star reviews for the lot. Look for a pattern. Many complaints about cars breaking down soon after the sale, or about repossession, are worth more than one angry post.

Why an Inspection Matters More Here

When a bank makes the loan, the car is only part of the deal. At a buy here pay here lot, the car is the collateral. If it breaks down and you cannot get to work, you may miss a payment. Then the lot can take the car back. You lose the car and the money you already paid.

That is why the condition of the car matters so much. A bad transmission or a hidden engine problem can start that chain in the first few weeks. Many of these cars are older, with high miles. Many are sold as is, which means repairs are on you from the day you drive off. Our guide on as is used car sales explains what that really means.

Compare Your Loan Options First

Before you go to a lot like this, see what else is out there. A credit union may approve you when a big bank will not. A larger down payment can open more doors. Our guide on dealer financing vs a bank loan walks through the choices.

If a buy here pay here lot is still your best option, that is fine. Just pick the lot with care, and pick the car with even more care.

Get the Car Checked

Our used car inspection is a 122 point check with a full OBD-II scan, including readiness monitors, a road test, tire and brake measurements, and photos of anything we find. We come to the lot. You do not need to be there, and the report comes the same day.

Common Questions

Get the Car Inspected