Is Purchasing a Car from a Buy Here Pay Here Car Lot a Good Choice after Bankruptcy?

Is Purchasing a Car from a Buy Here Pay Here Car Lot a Good Choice after Bankruptcy?

Are you tempted to stop when see signs at car dealerships that say "We Finance Everyone"? Do you think these Buy Here Pay Here car lots are a good choice for purchasing a car after bankruptcy? If so, you should be aware of the pros and cons so that you don't waste your money.

How Buy Here Pay Here Car Lots Work

Buy Here Pay Here Car LotBuy Here Pay Here car lots work much differently than a typical car lot. Instead of looking at the cars first, you find out how much credit the dealer is willing to give you. In most cases, they don't even run your credit report first.

After they determine your credit, you are shown the cars that are at or under that amount. Most of the time, you will have a very small selection of older high-mileage vehicles to choose from. You pick one, hand over a down payment, sign the paperwork and drive it home.

Once you have the car, you will have to go back to the dealer weekly or bi-weekly to make the payments. This is fine if the car lot is near your work or home, otherwise it can be very inconvenient. Your payments are likely to be high, because BHPH lots often charge really high interest rates.

So what happens if you can't make a payment on time? These tote-the-note car lots don't usually give you much leeway when it comes to making payments. They often install hidden GPS devices in the vehicles, so that they can repossess the car if you're even a day late on the payment.

Since dealers that offer in-house financing don't usually run credit reports, they also don't usually help you when it comes to re-establishing your credit after a bankruptcy. They typically don't report your on-time payments to the major credit bureaus. This means that the next time you need a car, you will probably need to return to them.

Alternatives to BHPH Auto Dealers

If you need assistance with getting a car after bankruptcy, there are alternatives to BHPH auto dealers. Online car financing services like will help you get the best auto loan possible. Our lenders also report your on-time payments to the credit bureaus, which will give you a stronger financial future.

Remember we are not lawyers and cannot give legal advice. The situations discussed are only our experiences over the years and may vary with each customer.

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