Also the Buy here Pay here places many of them use a LoJack type device that disables the vehicle if a payment is missed. It won’t disable vehicle while running but after shut off the next time it will not start no matter where you are.
Unfortunately many of this type of business has customers with less then ideal credit rates.
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I would say this business model is SPECIFICALLY meant for those with bad credit
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You’re being too kind.
Their business model is to offer on-site financing (at elevated rates) to people who can’t get a traditional car loan, sell a car, take whatever payments the buyer can make, and then repo the car at their first opportunity. They then sell it to another buyer at the same price and terms, and repeat the cycle until they finally sell it to a buyer who makes all the payments. All the payments that the first buyer(s) made are pure gravy, and they ultimately make money on the car when it finally gets paid off by someone.
It really isn’t much of a gamble for them because (a) the loan is secured by the car, and (b) they already know there’s a good chance you won’t/can’t make all the payments. If you could you’d be buying a car the traditional way.
I know I’ve just restated what db wrote. Apologies to db.
But what he said is true.
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You should try a fluid and filter change first, Worked for my daughter in her Saturn. 40k mikes ago.
Look at the main drags around military bases; especially the U.S. Army bases. They’re littered with predatory car dealers who know that many of those 19 year old enlistees are drawing more money than they’ve ever thought they would have and a new car is high on the agenda…
Speaking from experience…
they’re prime targets to car salesmen because they have to make the payments or be subject to administrative punishments beyond the wrist-slapping that the civilian world subjects them to,
and because their food, housing, medical care, and other basic needs are all taken care of… so a new car payment will really be their only “need” to spend their money on,
and because they’re likely to have their jobs securely until their enlistment ends. They don’t have to worry about getting laid off or fired. A sense of financial security comes with being in the military.
At least that’s the way it used to be.
But when I bought my new car, the “myth” proved to be true… if you want deployment orders, buy a new car. I got my overseas deployment orders two weeks after I bought my new car.
I don’t understand. Where else would you pay, besides the place you buy the car?
Edit; After reading the posts immediately above, apparently what that phrase means is the used car dealership acts as the financier, and you make the monthly payments in person directly to them, rather than by mail to a bank or credit union. I don’t see how they could block your car in however, when you arrive each month to make the payment. If they did that the first time, you’d just park on the street from then on, never driving your car onto the lot. I have a policy of never parking in a dealership or used car parking lot so it wouldn’t affect me even the first time. I always park elsewhere.
Huh! No, people usually send their payments to the loan institution ( Bank, Credit Union, or things like GMAC )
If you don’t believe me or understand . . .
Just read up on the matter. Google it, look at past newspaper articles, etc.
Everything I mentioned is common knowledge and has been reported by many credible news organizations
Not doubting you db4690, just never heard that term ‘buy here pay here’ before. I concur, it doesn’t seem like a very good model, at least from the buyer’s point of view.
I think most Buy Here Pay Here places are garbage, but there are a few good ones. We have a small family owned one (where we actually got our current Honda Odyssey) that has their own body and mechanic shop onsite. They don’t mind if you take it to get an inspection from your regular mechanic in addition to doing a full inspection of their own. They have been fantastic to us so far. The steering wheel adjust lever had snapped off for the previous owner, they replaced it for us no charge (especially impressive considering the steering wheel column has to come out to replace the lever, labor would’ve ridiculous…). They have been in business for a long time with many happy return customers. They even had full service history available for us (in addition to CarFax, which I barely looked at)
What you’re describing hardly sounds like a buy here pay here used car lot
Sounds more like a normal used car dealer
The buy here pay here lots require the buyer to return at regular intervals to make payments. This place you described, do they do that?
Yes, we make biweekly payments on site. They hold the title until it’s paid off, then we get the title. There is a lockout if we are late making payments, however they will work with people before locking them out (a friend of ours had previously bought a car there and missed a weeks work due to illness and called them and got a one time ok to skip a payment without them shutting the car off)
What kind of prices do they have?
Around here, those kinds of businesses sell tired old dogs for high dollars. Insanely high prices, actually
I’m heading home from work soon, I’ll check my paperwork when I get home
I would venture your interest rate is higher than a credit union or your bank.
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“But Here Pay Here” is common in my area. As is the term.
The difference between them and regular used car dealers is thus: with a Buy Here Pay Here dealer, the seller finances the purchase. There’s no financial institution involved. With regular purchases, the buyer takes a loan from a bank or credit union to purchase the car. The lending institution pays the seller and acquires the title. The lending institution has a “lien” on the vehicle, and once that’s’ cleared the lending institution releases the lien and signs the title over to the buyer. The buyer makes his/her payments to the lending institution and
“Buy Here Pay Here” sellers prey on people who cannot get financing through normal channels due to bad credit. They charge very high interest rates, knowing there’s a high probability that the buyer, who already has a history of bad credit, won’t be able to make the payments. When the buyer defaults, the seller repossesses the car and sells it all over again… to another buyer who can’t make the payments. They sell the same car multiple times, collecting payments on multiple loans, one after the other, on the same vehicle. If someone finally does buy the car and makes the payments, the seller makes all the money, including very high interest amounts.
It’s legal in most states, and loosely regulated. I consider it legalized robbery, but I suppose it could be looked at as the “car place of last resort” for those in financial trouble.
Can only speak for Oklahoma . We do have the title to vehicle and it has the lending institution listed on title. When final payment is made you receive a lien release form and so does the state. It is not necessary to do anything after that but I always pay $10.00 to have a new title without a lien listed.
Along with Buy here Pay here we also allow Pawn shops to loan against vehicles.
It’s sort of like renting a car, but if you rent long enough and reliably enough you eventunally own the car. I can see from a buyer’s point of view, that’s better than just keep renting and paying and never have a chance of owning the car. When I was a poor student & couldn’t afford a car but needed transport I bought a small motorcycle for not much $$$ 100 cc 2 cycle. That’s another alternative I suppose.
One time when I lived in fla. I went to a buy here pay here lot that had a car that I was interested in it had sign on the window stating the down payment I asked the salesman how much he wanted for it he said whatever the down payment was & so much a week I asked again & he repeated himself I asked how much total as I was going to pay total with no payment’s & he repeated himsellf & said that was the only way they sold car’s I told him goodby that I only make one payment & that was to pay it off the day I bought it.
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