The Buy Here Pay Here car lot vs. the Cash and Carry car lot
While both of these types of used car lots both exist to sell vehicles, they are quite different.
A buy here pay here lot is in the business of providing in-house financing primarily to those individuals who are credit challenged. These dealers are quite aware that their clientele are not the most reliable payers, and they subsequently make up for this by oftentimes charging exorbitant prices for vehicles that can be purchased for considerably less than on a cash and carry lot. These car lots appeal to those who cannot undergo conventional credit check scrutiny. Their criteria for a vehicle purchase is is not very stringent; mostly those requirements consist of having a job and an minimal down payment. This can be a great way to get into a ride without the worry of credit rejection. Let’s face it, to some, this may be the only avenue to follow for past credit problems. Of course, the price paid for the vehicle is a sobering reminder of their past credit history. While BHPH lots are forgiving, they normally offer customers what they want to sell them as opposed to what these people may want to buy. So, the typical BHPH consumer should not be surprised by the lack of choice in vehicles provided. On the upside many of these lots provide service contracts and loaner cars so their customers can keep riding. This makes perfect sense to the BHPH car lot because if their customers do not have transportation to get to work, then they won’t be able to make those payments.
The cash and carry lot is the most conventional way to acquire a used vehicle. The selection at these lots is diverse and inviting. The pricing is normally in line with what banks will allow to be borrowed on vehicles based on their published book value. This is one safe guard for the consumer by preventing them from overpaying. The banks simply will not let their customer pay more than the car is worth. The downside here is that, if the vehicle you have your heart set on is limited in supply, you are subject to the restrictions of a third party. One advantage here can be paying cash. So, it is safe to say that, your options are expanded if you take that course of action. You can also be in a better position to negotiate the best price. By taking the guess work out of third party financing, expands your power in the buying process. Most dealers will covet you as opposed to cash strapped or credit challenged consumers going hat in hand to dealers being forced to drive what they can get as opposed to what they want.
Shane McCormick
228 Main Street
Hope, Rhode Island 02823