The situation is a common one. You find yourself in need of a used truck but realize you do not have the cash to pay for one out of pocket. So before you get a chance to start searching all those used trucks for sale, you need to find a loan or some kind of financing to either make up the difference or break it down into manageable pieces. Only problem is, your bank or credit union didn't like your credit history. What next?
Buy Here Pay Here Dealers Explained
For many people the answer is buy here pay here truck dealers. Many used car lots will work out your financing with you directly without the assistance of a third party like a bank or credit union for a higher rate. Such used car lots are known as buy here pay here dealerships or in house auto financing dealers because the vehicle is purchased at the car lot and the loan payments are paid directly back to the dealership sometimes in person.
Such a situation is often also known as indirect lending. You can read more about the differences of direct lenders and indirect lenders on our buy here pay here car lots article but the short of it is in most indirect lending cases no physical money is loaned to you. Instead that used truck for sale is bought directly from the dealership for the cost of the loan. You get an affordable or cheap used car to drive and the dealer charges you a higher rate for taking on additional risk until the loan is paid.
Advantages & Disadvantages of Buy Here Pay Here
The advantage of buying a truck in such a situation is that even if you have poor credit, bad credit, or just no credit at all you still have a means of getting that vehicle you need to get the job done. Unfortunately it can be quite difficult to buy a used car for sale with bad credit so getting a chance to get back to work and rebuild your credit by promptly paying back your loan to the dealer can be for many a turning point.
The disadvantage behind buying a used truck for sale at an in house financing dealership is largely that the rates are less favorable. You are much more likely to get better rates at a bank or credit union but then you probably already knew you could get better rates with better credit. Another problem is that not all buy and pay here dealers are equal, and all of them are going to want to check your credit. Since repeated checks against your credit can actually harm your credit rating, you can do more harm then good if you repeatedly visit dealers different dealers in your search to find a used car for sale with bad credit.
One method of getting around this is to use a service like LotPro.com that is partnered with an entire network of dealerships nationwide. By just checking your credit once, we can compare your information to our entire participating network quickly and confidentially without the need to run around or further damage your credit. And of course we offer thousands of cheap used cars and trucks online for you to browse, all from Lotpro affiliated dealerships. Click on the banner below to get started today!