Purchasing a car from a “buy here pay here lot near me” lot can be a bad idea for many consumers. While a “buy here pay here” dealership can be a viable option for many people, it is important to understand exactly what you are getting yourself into before you sign on the dotted line.
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Unlike traditional car dealerships, “buy here pay here” dealerships do not require a down payment. They also offer in-house financing, which means they finance the deal themselves. This can lead to better interest rates and a wider selection of vehicles. However, it can also result in paying more for a car than it is worth.
While “buy here pay here” lots can be a good option for people with bad credit, it is important to keep in mind that the car you purchase could be more expensive than it is worth. In addition, some dealers will try to sell a GAP insurance policy as part of the loan. Depending on the dealer, you may also be asked to verify your income or residence.
When you buy a car from a “buy here, pay here” lot, you can be repossessed if you fail to make payments. Some dealers have a tracking device installed on the vehicle that allows them to repossess it if you fall behind. Others have the vehicle “killed” remotely, which means the car is disabled if you make a late payment.
Many buy here pay here dealerships will not report payment histories to major credit bureaus. This means that you may have a difficult time improving your credit score. However, if you make your payments on time, you can build your credit and be able to obtain an auto loan later.