Buy here pay here car lots offer consumers who have bad or no credit a chance to own a car. Another benefit you can accrue is rebuilding your credit through paying off this subprime car loan.
Buy here pay here car payments can often be cheap if you are picking an entry level car – $500 to $1000 for the downpayment, followed by $50 – $75 in weekly payments. The disadvantage is that you are paying a lot in total. With interest rates ranging from 15% to 25% or even higher, you can be assured that you are paying a lot for a buy here pay here used car over time.
Despite the high price you pay, if you think about it, there are two main benefits. One is that you may not be able to get to drive a car any other way. If you don’t have a lot of cash upfront to pay for a used car, and if you have bad or no credit, not many car dealers will work with you until you build up your credit report?
The second benefit is that in faithfully paying off your buy here pay here car loan, you can end up with a better credit score. If you currently do not have good credit, getting a bad credit car loan through these buy here pay here used car dealerships is a doorway into raising your credit score.
The better your credit score becomes, the better the types of financing deals will open up for you down the road. This is not only about financing for future car purchases. It could also help with mortgage loans, business or other personal loans.
The credit rebuilding benefit of buy here pay here car purchases should not be under-estimated. Since you are already paying a high price for your auto purchase, you want to make the most benefit out of the circumstance. Be sure to find out what the car lot’s policies are in reporting your successful and timely installments to the major credit reporting agencies like Equifax, Transunion or Experian. Some are obvious, as they advertise their buy here pay here program as a credit rebuilding program.
A lot of, but not all, buy here pay here car lots will report your timely payments. Some will even do it every time you make a weekly payment, so that your records get updated as quickly as possible. Others may wait and do it only once a month. Whatever the frequency, the most important point is that they do report.
If a buy here pay here auto purchase is all you qualify for right now, be assured that as your credit history builds up, you will find yourself eligible for better deals. Treat it as a stepping stone. We all make mistakes in our financial lives, or fall into bad situations. The good thing is that if we take the proper steps on credit rebuilding, dealing with bad credit can become a thing of the past.
