Zero Down Bad Credit Car Loans from Buy Here Pay Here Dealers

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Even with poor credit.

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Meghan Carbary has been writing professionally for nearly 20 years. A published journalist in three states, Meghan honed her skills as a feature writer and sports editor. She has now expanded her skill-set into the automotive industry as a content writer for Auto Credit Express, where she contributes to several automotive and auto finance blogs.


, - October 16, 2018

If you're looking for a zero down car loan from a buy here pay here (BHPH) dealer and you have bad credit, your chances of finding one are pretty slim. But, before you throw in the towel, think about this: anytime you put zero down on a loan, you end up paying more in the end.

Let's take a look at why zero down isn't your best option at a buy here pay here dealership, and why it costs even more in the end when you have bad credit.

BHPH Dealers are Different

First, you need to understand how a BHPH dealer differs from traditional auto financing. With a traditional lender, you're making your monthly payment directly to the lender, either in person, by mail, or online. With a buy here pay here – just as it states in the name – you buy and pay only at the dealership.

When you bring your payment directly to the BHPH lot, you may be required to pay in cash. Instead of a monthly payment, you're also sometimes required to make payments either weekly or bi-weekly, typically depending on your pay schedule.

The reason your payments go directly to a dealership in a buy here pay here situation is because these dealers are the lenders. They don’t rely on outside lenders, which usually means there's no need for them to pull your credit report or score. This makes it easier to get a vehicle if your credit is suffering – as long as you can afford the payment.

Why No Money Down isn't an Option

Since BHPH dealerships aren't relying on your credit to verify that you're going to make your payments on time, they're certainly not going to let you drive off in a car for free without some form of payment. So, think of a down payment as a good faith payment. By making that first payment up front, you're letting the dealer know that you're serious about financing a vehicle. With the right down payment, you can even drive away the same day.

The Higher Cost of Bad Credit

With the higher risk of bad credit comes higher interest rates, regardless of whether you're getting pre-approved financing, financing through a traditional lender, or buying from a BHPH dealership. The interest rates tend to be highest at buy here pay here dealers, which is another reason it's an excellent idea to have a down payment. The more money you put down, the less you have to borrow. A lower loan amount means less interest to pay, and, therefore, you pay less over the course of your loan.

When it's Time for a Vehicle

If you've been turned down by traditional lenders but need a vehicle, you may be leaning toward buying from a buy here pay here dealer. This is a great option for someone who needs a car, but is afraid their credit is standing in the way. Just be aware that going to a BHPH dealership can cost more in the long run due to higher interest rates – especially if you're not planning on using a large down payment. So, before heading to your local BHPH lot, your best bet is to have some cash on hand.

But, if you need a vehicle and aren't sure where to go, CarsDirect wants to help you. We work with a large network of dealers from coast to coast that have the lending resources available to help people in many different credit situations. To see what we can do for you simply fill out our online auto loan request form, and we'll get to work matching you with a local dealership!

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Meghan Carbary has been writing professionally for nearly 20 years. A published journalist in three states, Meghan honed her skills as a feature writer and sports editor. She has now expanded her skill-set into the automotive industry as a content writer for Auto Credit Express, where she contributes to several automotive and auto finance blogs.


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