Written by: Eric Bank
Edited by: Lillian Guevara-Castro
When you need a car, but your credit rating is on life support, take a look at the best buy here, pay here auto loans. BHPH dealerships are designed to find ways to put you in the driver’s seat when other dealerships can’t.
Naturally, these loans aren’t cheap, but they may be the difference between driving and taking the bus. Don’t get us wrong, we love public transportation, but it is no substitute for many driving chores, as any soccer parent with an SUV will attest.
Thankfully, a BPHP dealership can structure a bad credit auto loan for most people, and we’ve identified the three best online sources for easy car financing.
The Best BHPH Auto Loans Online
Each of these companies works with a network of auto dealers, including many BHPH car lot dealerships. Their job is to find you a local auto dealership that welcomes customers with all types of credit. Chances are good that the car lot they find will be a BHPH dealership with the independence needed to make loans that a traditional lender won’t.
Beyond the loan access they provide to subprime borrowers, you can close on an online BHPH loan from these dealer-connecting services quickly, often on the same day you apply. These networks save you the bother of trying to locate a dealer, and their service is free. If auto financing from the comfort of your chair sounds good, one of these services may be a perfect fit for your needs.
- Network of dealer partners has closed $1 billion in bad credit auto loans
- Specializes in bad credit, no credit, bankruptcy and repossession
- In business since 1999
- Easy, 30-second pre-qualification form
- Bad credit applicants must have $1500/month income to qualify
- See application, terms, and details.
| Interest Rate | In Business Since | Application Length | Reputation Score |
|---|---|---|---|
| 3.99% - 29.99% | 1999 | 3 minutes | 9.5/10 |
Auto Credit Express employs a nationwide network of BHPH and other dealers that will work to affordably finance the car you want despite your poor credit. To prequalify, you must have $1,500+ in dependable monthly income. You’ll also have to submit information about your debts, income, housing expenses, and any garnishments on your income.
Once you prequalify, you’ll be contacted by a nearby car dealership to complete your transaction as quickly as later today. Auto Credit Express has helped to arrange more than $1 billion in auto loans since its 1999 launch.
- Free, no-obligation application
- Specializes in auto loans for bankruptcy, bad credit, first-time buyer, and subprime
- Affordable payments and no application fees
- Connects thousands of car buyers with auto financing daily
- See application, terms, and details.
| Interest Rate | In Business Since | Application Length | Reputation Score |
|---|---|---|---|
| Varies | 1994 | 3 minutes | 9.0/10 |
Car.Loan.Com partners with the country’s widest network of auto dealers specializing in bad credit auto financing. In fact, you may receive a loan even if you are in or recently completed bankruptcy proceedings.
It takes but a few minutes to fill out the loan request form. The network works fast, so stand by to hear back from a direct lender within minutes of prequalification.
- Loans for new, used, and refinancing
- Queries a national network of lenders
- Bad credit OK
- Get up to 4 offers in minutes
- Receive online loan certificate or check within 24 hours
- See application, terms, and details.
| Interest Rate | In Business Since | Application Length | Reputation Score |
|---|---|---|---|
| Varies | 2003 | 2 minutes | 8.5/10 |
The MyAutoLoan.com network handles many types of car financing, including new car loans, used car loans, cash-out refinancing, leasing, and more, no matter what your credit situation. You get to choose from the multiple responses to your loan request after you prequalify.
It’s a good idea to compare your offers carefully since many important disclosures are often relegated to the fine print. Don’t be overly influenced by lower monthly payments because these may reflect a longer-term loan rather than a lower interest rate.
What is a Buy Here, Pay Here Auto Loan?
A BHPH auto loan is sourced from a BHPH dealership’s own funds, rather than those of an external bank or credit union. These loans represent easy financing, available to any type of customer with an APR tied to the customer’s credit score.
As the chart shows, even consumers with the worst credit scores can get an easy financing BHPH loan, albeit at an APR exceeding 20%. Consider the chart as a point of departure, as you can reduce the cost of a bad credit BHPH loan in a few ways:
- Select a less expensive car: The data assumes a car costing $15,000, which could be a late model small car with average mileage for its age. But you can spend less by looking for an older car that’s still in good condition. Several car guides give the relative durability of cars by model and year. Generally, the quality and useful life of most vehicles have significantly improved over the last 30 years, so you should be able to identify several models that can last 200,000 to 1 million odometer miles with proper maintenance. Buying one of these for, say, $10,000 will reduce your overall finance costs and will be more accessible when you have a low credit score.
- Increasing your down payment: The chart assumes no down payment, but by putting money down, you reduce your monthly payments and the overall interest you’ll have to fork over. If it’s possible to postpone a car purchase, you can use the extra time to accumulate a down payment. Ideally, you’d like to put down 20%, which in this case is $3,000. This will be possible for only some consumers with a bad credit situation, but in general, it always helps to make some kind of down payment. A down payment tells the car dealer that you are serious about buying the car and making payments on time, lest the car be repossessed, and you lose your equity.
- Seek a longer loan term: A 60-month loan is quite common, but you may be able to get a 72- or 84-month loan from a BHPH auto dealer. This will increase the overall interest you’ll pay, but at least your monthly payments will be more affordable.
Unlike traditional financing, a BHPH loan may require payments more frequently than once a month. Some may have installment loan periods of one or two weeks. Moreover, the car dealer may require you to make the biweekly or monthly payment in person at the dealership.
Generally, you can increase your chances of getting a BHPH loan by showing a flexible attitude toward accommodating the dealer’s requirements. You’ll find a BHPH lender open to solutions more creative than those you’d encounter with traditional financing sources.
How Does a Buy Here, Pay Here Dealership Work?
A buy here, pay here auto dealership sells cars and finances them internally. These dealerships are usually independently owned and can make their own loan decisions.
This differs in several ways from a traditional dealership affiliated with a car manufacturer. A traditional dealership must observe strict standards for car financing that could leave you high and dry.
The three networks reviewed above work with BHPH lenders and other lenders that specialize in helping poor credit consumers overcome obstacles to vehicle ownership. It’s important to work with only reputable BHPH dealerships since some dealerships overcharge customers. BadCredit.org reviews only reliable companies with reputations for honest dealings.
These dealerships can make a BHPH financing offer much faster than other dealerships that must wait for a bank executive or outside loan review committees at financial companies to greenlight a loan. If anyone can get you a car loan, motorcycle loan, truck loan, or SUV loan, it’s a BHPH dealership.
How Do I Finance a Car With No Credit?
If a car loan is to be your initial foray into the wonderful world of credit, we welcome you. Many young people today eschew credit cards and other forms of credit yet find they cannot afford the car they need without BHPH financing.
The easiest way for credit newbies to get a car loan is to recruit a cosigner who will be responsible for making timely payments if you’re unable to. A cosigner reassures a BHPH dealer that someone with a proven track record will repay the loan if it becomes necessary.
Even if you can’t line up a cosigner, some BHPH dealerships will lend to customers with no credit histories who have adequate income. Ask the BHPH dealer directly about the minimum income necessary to qualify for a loan.
You can establish a payment history by getting a secured credit card. A secured credit card requires cash collateral but no prior payment history for approval. Your account history is reported to the three major credit bureaus, which can help you achieve a good credit score with timely payments.
What Happens If You Stop Paying on a BHPH Car?
Your account will go to collections if you stop repaying your bad credit car loan. You may be given a chance to work out a more affordable monthly payment schedule by increasing the loan term.
Failing that, a repo agent will probably take your car. It can do so without a court order because the original loan usually includes a lien on the car that allows quick repossession if payments cease.
Your vehicle will be repossessed by the lender if you stop making payments.
Your credit score will suffer if your car is repossessed, especially if your score was respectfully high beforehand. The mark will remain on your credit history for seven years, making it that much harder to get another loan. The bottom line is to avoid entering a bad credit car loan if you don’t think you can afford it.
Is Buy Here, Pay Here Bad?
Some BHPH dealerships are bad apples. They charge too much in fees and interest and are on a hair-trigger to repo your car if you miss a payment. They may even sell you junk cars disguised as great bargains.
However, it would be wrong to smear the entire BHPH fellowship because of the bad actors. Many BHPH dealerships are honest and straightforward. The three lender services reviewed earlier have earned solid reputations, which they wouldn’t want sullied by an unethical BHPH dealer on their networks.
Note that some BHPH dealers don’t report your payments to a credit bureau for inclusion on your credit report. You want a credit bureau to update your credit report because this can help you increase your credit score, so bypass the nonreporting dealerships if you can.
If you are going to deal with a BHPH auto dealer without first going through Auto Credit Express, Car.Loan.Com, or MyAutoLoan.com, make sure you perform some due diligence first. Check them out at the Better Business Bureau, Trustpilot, and with your secretary of state. If they seem a little shady, take your business elsewhere.
Compare the Best BHPH Auto Loans Online
Our review of the best buy here, pay here auto loans points to one of the safest ways to get a vehicle loan when your credit is bad. You can click on the APPLY HERE buttons to find out more about each loan network and to request a car loan.
With a little comparison shopping, you should be able to find an affordable car loan that will get your motor running in no time.
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