Buy here pay here dealers charge 30% of interest! BHPH dealerships are not regulated! Hey are you looking to buy a vehicle from BHPH dealership but these misconceptions are hovering in your mind? What are you looking for, just scroll down and vanish your confusion regarding BHPH dealership?
People have different myths about BHPH financing and the most common one is that BHPH dealers charge a relatively high rate of interest than the traditional dealers. To buy a car is not a tiny task and you have to pass through several formalities but via BHPH dealership you just need to verify your home address and proof of income to buy a vehicle. But there are numerous myths about BHPH and to end up your negative thinking about BHPH I write down this post. So let go through the post and decide whether you should buy your dream car from BHPH or from the traditional dealers.
4 common myths about Buy Here Pay Here
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If you are here then you would probably hear lots of rubbish about BHPH like they sell old junk vehicles, charge a skyrocketing interest rate, and many more but all are wrong. Here are the 4 common myths you need to know if you are looking to buy a car right now:
1.BHPH dealers charge a high rate of interest
First and foremost myth about Buy here pay here dealership is that people think that buying a car from BHPH means paying an excessive amount of interest. Indeed their rate of interest is a bit higher than the traditional ones but you can’t consider it excessive.
But here is a reason behind it, you know very well BHPH dealers avail vehicles for those who have bad credits and everyone have denied for a loan. There is a big risk in such a situation and in case a particular buyer decides to stop paying their car loan and navigate to another country then what will BHPH dealer does. Nothing, in such scenario all of their money will be lost.
It is quite wrong that BHPH dealers charge a 30% rate of interest and after analyzing different factors I get to know that they charge 10% to 20% based on buyer’s credit.
2. BHPH dealers tend to sell the old model vehicles
People think that Buy here pay here dealerships used to sell old and high mileage vehicles but it is a totally wrong perception about BHPH. BHPH dealers sell new model cars with low mileage and you can find a variety of vehicles that suits everyone’s budget and need as well. Before selling every vehicle is passed through a tough inspection and if there any default found then BHPH inform the buyer. If your financial condition is too poor to afford a brand new car without any flaws then you can buy such a car but BHPH aware you legally.
3. BHPH dealers repossess your car
Before guiding you about this misconception, will you please name a financial institution which doesn’t repossess its money or other items if the payments are not done timely. I think you are unable to answer because every financial institution give you a loan after signing a contract and it is clearly mentioned in the contract that they will repossess the particular thing or money in case you are not in the situation to pay the debt.
Indeed reputed dealerships like Mercedes Benz tends to repossess their vehicle in the same case. It is the deal of great loss for BHPH dealers to retake the car to recover their money. Every BHPH dealer wishes that their customer pay their debt so that they have to retake the vehicle. BHPH dealers show cars after understanding your financial conditions and if you still fail to pay the loan then what can they do???
4.BHPH dealerships are not regulated and they can scam you
Ooops…such a foolish lie and I couldn’t stop myself to laugh after hearing. A wide array of car buyers tend to think that there are no rules and regulation of BHPH dealerships and they can scam you. The truth is that all the Buy Here Pay Here sellers follow the federal law and also show the buyer’s guide for every vehicle. So stop thinking that BHPH dealers sell you lemons in return of your valuable money. To confirm the fact here is the list of rules and regulations that every BHPH dealer follow:
- The used car rule
- The safeguards rule
- State Usury Laws
- State & Federal Unfair & Deceptive Practices laws
- The risk-based privacy rule
- The Fair Debt Collections Practices Act
- The Red Flags Rule
- And lots more…
Note down before departure
Indeed these myths are damaging the reputation of the valuable auto industry which helps the poor credit community to buy their dream car. BHPH industry has certain laws and regulation and you will always get the fair deals not a scam. But still, you are not satisfied then do your own research before buying a vehicle from BHPH dealers.
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