If you’re shopping for a car and have bad credit, you may have decided that you need buy here pay here financing to get approved. Or perhaps you have applied at a dealership and got turned down for bank financing, so you were referred to a buy here pay here dealer. You may have some questions about how to pick a reputable dealer, get the most benefit from your buy here pay here financing, and how to avoid a scam.
- How long has the dealership been in business?
Just like in other industries, the longevity of a business can tell a lot about their reputation. There has been some fly by night, buy here pay here scam car dealers. Car dealers must maintain an automotive dealers license in good standing with the state. Be especially guarded if you can’t find consistent contact info for a dealer, or if they don’t seem to operate out of a location. The dealer licensing process in Colorado is extensive which requires background checks, credit checks, and additional checks to make sure that they’re a compliant business entity to prevent fly by night dealers or dealers that have criminal or white collar crimes. A dealer must have their Automotive Dealership License posted at their location, along with Automotive Salesperson Licenses, within view for customers to verify that they are current and licensed with the state.
- Do you report to the credit bureau?
Not all buy here pay here dealers report your payment history to the credit bureau. Many will only report to the credit bureau if you fall behind or have a repossession. It involves more work for the dealer to report your buy here pay here credit history to the credit bureau, but it is in your best interest. If you’re serious about improving your credit, your on-time payment history, when reported to the credit bureau helps prove your credit worthiness.
- What do your customers say about you?
Third party online review sites are a consumer’s resource to learn more about a business. Most businesses don’t have a perfect five-star rating – your favorite restaurant probably doesn’t either. But positive reviews can help you find benefits about a dealer from another consumer like you, and a dealer’s response to negative review can be insightful too. Just as a heads up, for privacy concerns a dealer or finance company cannot address a consumer’s finance or credit history in a public forum because of privacy laws, so some dealer responses may not address all issues brought up in the review. High review averages can be hard to achieve in the automotive industry, so a three or four-star review average with at least a dozen reviews can give you a better insight to a variety of customers’ experiences and give you the chance to judge the dealer’s strengths and weaknesses and which were reasonable reviews about the dealer.
- How do I make my payment?
When you purchase with buy here pay here financing, rather than making your payments at a bank or other lender, you will be making payments to the dealer. Check to see what your payment options are. Some buy here pay here dealers may still require you to bring your payment in at the location, or another location, but other dealers provide more payment options like automatic credit card payments, online payment portals, as well as the ability to send in a check or money order. Make sure that making the payments is convenient to you so you don’t fall behind.
- What do I need to bring with me for my appointment?
Finance programs and the finance institution will vary with their requirements of proof of income, proof of residency, and reference requirements to qualify for their programs. Before you get to the dealership ask what you will need to bring in, especially if you are traveling from out of area to buy a car. At Mark’s Auto Sales, you will need bring these items for buy here pay here car purchases.
- What if I have car problems after I buy from you?
Know if you are purchasing the car with a warranty or in as-is condition. If you are purchasing a warranty, what are the terms of the warranty? If you choose to bring the car back a few days after the purchase and unwind the sales, know the fees associated with the mileage and days you had it. If there are issues in the months or years after purchase, do they make repairs? If you can’t afford to pay for those repairs in their entirety, will they give you a side note to pay back those repairs?
Need a little more car buying guidance? The Colorado Auto Industry Division created this list of car buyer purchasing tips and considerations to take into account as a car buyer to make sure that you understand the various aspects of the deal. By knowing what questions to ask, and what to get in writing, you will be able to look after your best interests as a car buyer whether you’re getting bank financing, buy here pay here financing, or purchasing a vehicle with cash.