Buying a used car can be a challenging, intimidating process for anyone, but never more than trying to find wheels when your credit isn’t where you would like it to be. But with used vehicle purchases on the rise for the past seven years, there are more options than ever for drivers with lower credit scores, such as buy here pay here dealers. If you’re looking for used vehicles for sale in Indianapolis but are unfamiliar with the in-house financing, read on to learn more.
What’s the Difference Between Buy Here Pay Here and Traditional Loans?
Where traditional auto loans are financed through third parties such as banks or credit unions, buy here pay here car loans are financed through the dealership. This allows you to cut out the middle man in terms of financing. Rather than making monthly payments to your lienholder, payments will be made on a weekly or biweekly schedule to the dealership. In terms of differences between tote the note dealerships and traditional dealerships, there is often very little, especially as more and more dealerships adapt to offer bad credit financing. These services are not typically advertised as “buy here pay here” or “tote the note,” but if you see language such as “we finance” on a dealer advertisement, that typically means that these services will be available to you.
What are the Advantages of Buy Here Pay Here?
Typically, buy here pay here car lots are more interested in a buyer’s ability to make the required payments than they are a credit score. Loans are provided with proof of income and a residential address, and a credit check is not performed. This poses an advantage to drivers who have been turned down for loans by other agencies, allowing people who are in the process of rebuilding their credit to get back on the road. Additionally, buy here pay here institutions are more willing to accept high-mileage or older-model trade-ins that other dealerships might not as part of a down payment. This is because these dealerships are more likely to be able to find a buyer for these vehicles, which makes them more likely to consider it. But taking this route to car ownership doesn’t mean that you have to sacrifice comfort, style, and reliability. Many buy here pay here used cars are late-model vehicles with good engines, traded in by people who are in similar credit situations. When looking for used vehicles for sale in Indianapolis, an area with a higher population density, you’re much more likely to be able to find an attractive car that’s well cared for.
What are the Disadvantages of Buy Here Pay Here?
If you’re looking to rebuild your credit, a buy here pay here car loan might not be the way to go. Many of these dealerships don’t report to the three major credit unions, which means that unless you’re taking out another loan, you’re unlikely to build your credit over time. If you’re looking for used vehicles for sale in Indianapolis, be sure that you do your research and find a dealership that will report timely payments to credit bureaus. Failure to do this might mean that you’ll be looking at another high interest loan down the line. It’s also important to note that many buy here pay here car lots enable devices such as GPS tracking in order to keep track of vehicles that drive off the lot. Because buy here pay here car loans tend to go into default more often than traditional loans, dealerships put measures in place to be able to find or deactivate the car in the case of a missed payment. Be sure to discuss this with your sales representative so that you have a clear picture of what you can expect once you get on the road.
If you’re looking for used vehicles for sale in Indianapolis but you’re still in the process of repairing your credit, a buy here pay here used car might be the right option for you. With flexible payment options, accessible loans, and onsite vehicle servicing, these dealerships are ready to help you get back on the road.
