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Financing from Buy Here Pay Here Car Lots

Staff Writer - LotPro.com

Consumers with bad credit that need a car often turn to local used car lots that offer Buy Here Pay Here financing. At a buy here pay here (BHPH) car lot the dealer, not a finance company, extends credit to the consumer. Unlike auto finance companies most BHPH car lots do not report the payment history to the three credit reporting agencies. So, if your goal is to repair your credit rating you should first attempt to secure an auto loan through a direct or indirect lender.

Direct Lenders
Lenders that offer loans directly to consumers are direct lenders. Auto loans from direct lenders are normally reserved for people with good to fair credit. Consumers that get a loan from a direct lender can shop like a cash buyer at any dealership they choose. Examples of direct lenders include banks and credit unions. Direct lenders normally have stringent underwriting guidelines and only lend to people with fair to excellent credit

Indirect Lenders
Lenders that only lend to consumers if they buy a car from their dealer partners are indirect lenders. Most indirect lenders have much less stringent underwriting guidelines than direct lenders. There are indirect lenders that lend to people with no credit, bad credit, even after bankruptcy.

So if you have bad credit and your goal is to re-establish a good credit rating you should first attempt to get an auto loan through and traditional auto dealer and an indirect lender. If you are unable to get approved then you should consider a Buy Here Pay Here car dealer.

LotPro.com offers consumers loans from Traditional Dealerships as well as BHPH Car Lots .

Click to Apply for a Bad Credit Auto Loan

If you go with a BHPH dealer be prepared to make weekly payments as this is the method of repayment that most car lots use.