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Buy Here Pay Here Financing Basics

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author photo by Autotrader October 2007

Chances are that you've seen the words "Buy Here Pay Here" painted boldly across the windows of a local car dealership. But whether you're traveling 10 mph or cruising by at 70, it's difficult to understand anything from those four words.

The Internet doesn't provide much more clarity. The average search for the phrase "Buy Here Pay Here" brings back more than 40 million results, each one saying something slightly different than the next.

Where do you start with the Buy Here Pay Here experience, a financing model that could offer the car you want at the price you need?

Right here.

We've gathered the most relevant information about the Buy Here Pay Here world into one easy-to-read article.

What does Buy Here Pay Here mean?
Despite being the fastest growing segment in the auto sales industry, there's not an official definition for Buy Here Pay Here in the dictionary. Buy Here Pay Here (BHPH) financing means that you arrange a loan and make payments on it at the dealership. You purchase the car through what's referred to as in-house financing versus through a third party, such as a bank.

Instead of making monthly payments to a traditional lender, you make weekly or bi-weekly payments at the dealership. Although some BHPH dealerships will accept payment by phone or online, many require that you physically bring a check or cash to their location. You therefore "buy" the car at the dealership and "pay" on the loan at the dealership.

What's the difference between a BHPH dealership and a traditional dealership?
Depending on the dealerships you visit, very little. In fact, many traditional new and used car dealerships have started to offer BHPH financing as an option. You might not see "Buy Here Pay Here" written across the windshields of their cars, but phrases such as "We Finance" may indicate that option is available.

The key difference between a traditional dealership and one that strictly specializes in BHPH financing lies in the shopping experience. At a traditional dealership, the financial conversation is often the last part of your discussion. After you've seen a few models, asked a host of car questions and possibly test driven one, the dealer will help you explore payment options.

At a BHPH dealership, the process is usually reversed. The dealer will ask you a series of questions, possibly run a credit report and invest in understanding your credit experience before showing you available cars. Then, with your monthly payment range and down payment information factored in, they'll show you cars that fit your financial situation.

Who should go to a BHPH dealership?
BHPH dealerships are primarily designed for shoppers who may have experienced significant financial bumps and bruises. If your credit score is on the lower end of the scale or if you've had trouble getting an auto loan, a BHPH dealership should be one of the places you visit during a car search.

What are the benefits of BHPH financing?

Available cars, available credit
an optiononly option

Opportunities to improve credit


Trade-in flexibility

To learn more about your possible options, use the Car Credit Wizard. You can estimate your credit level and get a list of dealers who are equipped to help you.


© 2007 AutoTrader.com, Inc. All Rights Reserved.
"AutoTrader.com" is a registered trademark of TPI Holdings, Inc. used under exclusive license.

This image is a stock photo and is not an exact representation of any vehicle offered for sale. Advertised vehicles of this model may have styling, trim levels, colors and optional equipment that differ from the stock photo.
Buy Here Pay Here Financing Basics - Autotrader