With the way things are going in the auto finance market, many customers who used to be able to get reasonable financing on a new or used vehicle are now -- out of luck. There are just fewer lenders willing to extend credit to people with the slightest credit issues.So, if there are few lenders out there willing to work with people with past credit problems, what choices remain? Either paying cash (which is always a good idea, but sometimes out of reach for many people), or perhaps "buy-here, pay-here."
Buy here pay here, or dealer financing, is where you don't make payments to a bank or finance company. You make payments to the dealer. It might seem like a good idea when all else fails, but you have to really look at the deal before proceeding.
You need to ask the dealer the following questions before considering a purchase at a buy-here pay-here store.
- Does the vehicle come with a warranty? -- Any reputable dealer will stand behind his vehicle with a warranty. Don't let him give you a 30 day 50/50 warranty either. That kind of warranty only covers the most basic options and you still have to pay half.
- Does the dealer have a service facility? -- If not, odds are slim that he will be willing to work with you in the future if your vehicle needs service.
- Does the dealer report to the credit reporting agencies? -- If not, then all your good payment history will do NOTHING to help get you to the point where banks are willing to work with you. Let me repeat that -- if your dealer cannot report to your credit bureau, then your purchase will not help you build new credit.
If you have questions about this or any other car or credit related issue, please email me at ajwiley@cawcawcaw.com or call me at 877-942-2769. Or you can come see us at Consumers Auto Warehouse in Staunton, VA on Richmond Road.
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