Used Cars - Buy Here Pay Here Lots

Used Car Lots-Buy Here Pay Here plans make arrangements that permits low-income or poor-credit customers to buy cars, paying sub-prime interest rates at the lot where the vehicle was purchased.

The down payment is normally very close to what the used car lot paid for them. Then they finance the cars themselves. Successful completion of payments results in the title transferring to the customer at the end of the contract period.

Typically these lots buy cars from auction houses or from the new-car dealer trade ins in the $1500 range. Then they give the vehicle a  good detailing. The car goes on the lot with a sign that says $1500 down, $150 per month for 24 months. Most buy here-pay here used car lots require that the buyer bring a paycheck to the dealership every pay period.  The dealer deducts the payment and returns the rest of the paycheck to the customer. If all the payments are made the dealer realizes a profit of $3600.

Since 40% to 50% of sub-prime customers default on their contracts.  They usually can't afford the repairs and insurance necessary to keep the cars on the road, The used car lot ends up repossessing and repeating the process which raises their profit even higher.

 If you  buy a car or truck at one of these lots, take an extensive test drive and make sure an independent mechanic inspects your prospective purchase and ask Questions.

Ask If....

• If the car was a repo when the lot bought it and how many times the vehicle has been sold from the same lot.

• Ask if the vehicle has a salvage title.

• Also ask for references from previous customers.

• Have an ASE certified mechanic check them out for you.

Repossessions

Most financial institutions use repossession units staffed with experienced auto-locating detectives. Using information from credit applications, reporting firms, and your friends and relatives, these companies locate vehicles for repossession.  Some delinquent customers return their cars to the lender when requested, but most repossessions take place using a tow-truck or an extra set of keys. Most banks unload their repossessed vehicles at dealer auctions, but a few banks may still offer them at public auctions. You can also call local banks and ask if they have repos for sale.  Be Careful, maintenance stopped before the car payments, so be extra cautious of repo cars. 

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