Nearby Dealerships
BHPHNear.com is the premier directory of Buy Here Pay Here dealers in the United States. Our comprehensive listings make it easy to find a dealer near you, and our user-friendly search tools make it even easier to find the perfect car for your needs.
Find the right dealer
With BHPHNear.com, you can search for Buy Here Pay Here dealers in your area and get the contact information you need to get in touch with the right people.
Nationwide Coverage
Our comprehensive directory lists dealerships across the United States, so you can easily find one near you. Find the best car dealers that offers financing for bad credit, no credit and needs of people with financial problems.
Popular Buy Here Pay Here Dealers
Popular dealers from our directory where you can find details of America's buy here pay here dealers and see their amazing deals on new or used cars, trucks, vans and many more.
State wise list of Best BHPH Dealers in the USA
Find the nearest buy here pay here dealers in USA listed state wise who will finance your purchase of a used car. With our online searchable directory of car dealerships you can find used car dealers financing with no credit checks.
Recently Listed Buy Here Pay Here Dealers
What Is Buy Here Pay Here (BHPH)?
The term “Buy Here Pay Here (BHPH)” refers to auto dealerships in which the financing for the vehicles purchased is done in-house. These types of dealerships are typically involved in the sale of heavily-used cars, and they tend to cater to customers with relatively poor credit ratings.
How Buy Here Pay Here work?
The majority of auto dealerships focus their attention on generating new sales; they delegate the financing portion of their business to a third-party provider. In the case of dealerships affiliated with a major automotive brand, this financing might be extended by an affiliate of the manufacturer itself. In other cases, the dealership might use dedicated lease financing companies that are not affiliated with the auto manufacturers.
BHPH dealerships are an exception to this general rule because they provide their own lease financing themselves. The benefit of this approach is that the BHPH dealership can enjoy the interest revenue associated with their leases. On the other hand, these dealerships may be prone to cash flow problems. After all, the price received for the cars that they sell is stretched out over the life of the car loan.
The BHPH business can be especially difficult if it is geared toward subprime borrowers. BHPH dealerships have been known to offer flexible terms, such as 0% down payments, no-interest financing periods, and loans without any preliminary credit check. Although these measures might more readily generate new business, they can also increase the default risk of the business. As a result, these flexible loan terms can significantly threaten the dealership’s long-term profits.
The BHPH Industry originated primarily in the early 1970s during the United States savings and loan crisis. With many similarities to the financial crisis of 2007-2010 credit was difficult to obtain, unemployment was rising & the economy was still in a transformation from a production-based economy to a service-based economy.
What are the key takeaways of BHPH dealerships?
Buy here, pay here refers to a type of car dealership that provides financing for its customers in-house.
Most car dealerships rely on third-party financing firms.
While the buy here pay here business model can generate additional interest revenues, it can also produce cash flow problems because of the delayed receipt of cash and the increased risk of default.
What is buy here pay here? Show one example of Buy Here, Pay Here (BHPH)
David is the owner of a used car dealership. He is seeking to expand his current customer base. He has found it difficult to compete with the brand-affiliated dealerships in his local marketplace, who tend to attract his region’s more affluent customers. In an effort to expand his revenues, David decides to focus his marketing strategy on subprime customers who may be unable to afford the financing terms offered by his larger and more traditional competitors.
To that end, David begins offering flexible financing terms on an in-house basis, effectively becoming a buy here pay here dealership. He takes out an advertisement in several local newspapers, offering “no money down” used cars to customers with bad credit. He does not require a preliminary credit check. To seal the deal, he offers a six-month interest-free period.
David reasons that, although he will likely experience higher default rates than his competitors, he can make up for this risk by charging relatively high-interest rates. He also intends to aggressively repossess cars from customers who fail to make timely payments. To support that strategy, he even considers installing trackers and other devices onto the cars to identify them and to render them inoperable if the customers fail to pay.
How does the buy here pay here system work?
Automobile dealers who still wanted to sell cars had to find a way to deal with the increasing price of vehicles relative to income. They had to sell these vehicles to wary consumers who were unwilling or unable to pay cash for the new purchase at the point of purchase. In many cases, when banks would not lend to the consumer, the automobile dealer would start a related finance company (RFC) and have the finance company approve the loan on the vehicle. This represented a step into the consumer finance business for automobile dealers.
The advantage to the dealership of having an RFC finance was decreased risk on the sale and finance of the vehicles sold. Since both the RFC and the dealership had the same ownership, the owners could benefit from the profit on the sale of the vehicle and the profit on the loan for the vehicle. Historically, the down payment required on a buy here pay here loan was generally larger than the total profit on the sale of the vehicle. Therefore, if the buyer didn’t make payments, the RFC could repossess the vehicle and sell it again at the dealership.
Since 2008, many outside lending institutions have entered the market and the average down payment on a BHPH loan has significantly decreased, as dealers try to maintain a share of the market. Many of the benefits of separating the RFC from the BHPH dealership are based on the tax code changes of the Tax Reform Act of 1986. The Act restricted any companies that utilize inventory in their operating business from using cash accounting.
What are the issues regarding BHPH dealerships?
Due to the high upfront cost of securing inventory, automobile dealerships frequently have a problem managing their cash flow. Often, used car dealerships purchase inventory using a retail floorplan, a type of specialty line of credit, that typically requires the automobile to be paid off in full within 90 days of purchase. This means that automobile dealers use loans to finance their operations and therefore have an interest in selling vehicles as quickly as possible in order to use the proceeds to pay off the loan rather than paying off the loan out of their working capital. One difficulty that this presents to BHPH dealers is that when they sell a vehicle to a BHPH customer the RFC needs to produce the loan funds so the dealership will have the funds to pay off the line of credit on that automobile. Often a ‘cash crunch’ is a primary reason for dealerships to go out of business.
Are there any regulations in the United States on buy here pay here dealership system?
Related finance companies are not regulated as strictly as banks by the Federal Reserve, rather they are regulated by the Department of Financial Institutions or Department of Commerce on a State level depending on the State. Regulations may include maximum interest rate, late fee amounts, grace periods, and so forth. Some of the companies that have started as RFCs have grown large enough that they became Industrial Banks which are FDIC Insured banks owned by non-financial institutions.
How to buy a car with a buy here pay here dealers?
Meet the staff of buy here pay here dealer and bring the following:
- Driver’s license
- Most recent paystub
- Utility bill in your name or lease agreement
- Down payment
Then, pick your used car and test drive the vehicle that fits your budget and needs.
Nowadays, some BHPH dealerships are about making car ownership accessible, simple, and delightful in India as well as a few other countries. Especially in a country where four wheels fuel dreams, less than two percent of young Indians who live in the USA are satisfied with the used car experience. The goal of a BHPH dealer is for the country to trust their method, belief in, and enjoy their cars. In this way, they aim to propel a billion dreams.
In the BHPH dealership, a customer sometimes has to pay a huge interest rate on their vehicle. In some cases, the interest amount comprises 1/3rd of the car’s actual value. Nonetheless, the dealer finalizes your monthly installments based on your income only. While with spinny, customers can now touch their dream car and drive it flawlessly. And probably this is the main benefit of this auspicious service. At BHPHNear, we strive to maintain our position as an industry leader by providing you with listings of the best dealerships around and tools that allow you to select a location that fits your criteria and lifestyle.
Top Reviewers at BHPHnear.com
Max Medina
Elizabeth
Pedro Graves
Eugene
Felicia Horton
Richmond
Clinton Perry
Elizabeth
Alexis Gardner
Miami Gardens
Robert Morgan
York
Tamara Walker
Corona
Lori Morrison
Pearland
Joan Kelly
Costa Mesa
Leon Kelley
Fountain Valley
Aiden Hughes
Roanoke
Ben Parker
Mesa
Karl Perez
Scurry
Eric Tucker
Murfreesboro
Levi Davis
DetroitWhat Is Buy Here Pay Here (BHPH)?
The term “Buy Here Pay Here (BHPH)” refers to auto dealerships in which the financing for the vehicles purchased is done in-house. These types of dealerships are typically involved in the sale of heavily-used cars, and they tend to cater to customers with relatively poor credit ratings.
How Buy Here Pay Here work?
The majority of auto dealerships focus their attention on generating new sales; they delegate the financing portion of their business to a third-party provider. In the case of dealerships affiliated with a major automotive brand, this financing might be extended by an affiliate of the manufacturer itself. In other cases, the dealership might use dedicated lease financing companies that are not affiliated with the auto manufacturers.
BHPH dealerships are an exception to this general rule because they provide their own lease financing themselves. The benefit of this approach is that the BHPH dealership can enjoy the interest revenue associated with their leases. On the other hand, these dealerships may be prone to cash flow problems. After all, the price received for the cars that they sell is stretched out over the life of the car loan.
The BHPH business can be especially difficult if it is geared toward subprime borrowers. BHPH dealerships have been known to offer flexible terms, such as 0% down payments, no-interest financing periods, and loans without any preliminary credit check. Although these measures might more readily generate new business, they can also increase the default risk of the business. As a result, these flexible loan terms can significantly threaten the dealership’s long-term profits.
The BHPH Industry originated primarily in the early 1970s during the United States savings and loan crisis. With many similarities to the financial crisis of 2007-2010 credit was difficult to obtain, unemployment was rising & the economy was still in a transformation from a production-based economy to a service-based economy.
What are the key takeaways of BHPH dealerships?
Buy here, pay here refers to a type of car dealership that provides financing for its customers in-house.
Most car dealerships rely on third-party financing firms.
While the buy here pay here business model can generate additional interest revenues, it can also produce cash flow problems because of the delayed receipt of cash and the increased risk of default.
What is buy here pay here? Show one example of Buy Here, Pay Here (BHPH)
David is the owner of a used car dealership. He is seeking to expand his current customer base. He has found it difficult to compete with the brand-affiliated dealerships in his local marketplace, who tend to attract his region’s more affluent customers. In an effort to expand his revenues, David decides to focus his marketing strategy on subprime customers who may be unable to afford the financing terms offered by his larger and more traditional competitors.
To that end, David begins offering flexible financing terms on an in-house basis, effectively becoming a buy here pay here dealership. He takes out an advertisement in several local newspapers, offering “no money down” used cars to customers with bad credit. He does not require a preliminary credit check. To seal the deal, he offers a six-month interest-free period.
David reasons that, although he will likely experience higher default rates than his competitors, he can make up for this risk by charging relatively high-interest rates. He also intends to aggressively repossess cars from customers who fail to make timely payments. To support that strategy, he even considers installing trackers and other devices onto the cars to identify them and to render them inoperable if the customers fail to pay.
How does the buy here pay here system work?
Automobile dealers who still wanted to sell cars had to find a way to deal with the increasing price of vehicles relative to income. They had to sell these vehicles to wary consumers who were unwilling or unable to pay cash for the new purchase at the point of purchase. In many cases, when banks would not lend to the consumer, the automobile dealer would start a related finance company (RFC) and have the finance company approve the loan on the vehicle. This represented a step into the consumer finance business for automobile dealers.
The advantage to the dealership of having an RFC finance was decreased risk on the sale and finance of the vehicles sold. Since both the RFC and the dealership had the same ownership, the owners could benefit from the profit on the sale of the vehicle and the profit on the loan for the vehicle. Historically, the down payment required on a buy here pay here loan was generally larger than the total profit on the sale of the vehicle. Therefore, if the buyer didn’t make payments, the RFC could repossess the vehicle and sell it again at the dealership.
Since 2008, many outside lending institutions have entered the market and the average down payment on a BHPH loan has significantly decreased, as dealers try to maintain a share of the market. Many of the benefits of separating the RFC from the BHPH dealership are based on the tax code changes of the Tax Reform Act of 1986. The Act restricted any companies that utilize inventory in their operating business from using cash accounting.
What are the issues regarding BHPH dealerships?
Due to the high upfront cost of securing inventory, automobile dealerships frequently have a problem managing their cash flow. Often, used car dealerships purchase inventory using a retail floorplan, a type of specialty line of credit, that typically requires the automobile to be paid off in full within 90 days of purchase. This means that automobile dealers use loans to finance their operations and therefore have an interest in selling vehicles as quickly as possible in order to use the proceeds to pay off the loan rather than paying off the loan out of their working capital. One difficulty that this presents to BHPH dealers is that when they sell a vehicle to a BHPH customer the RFC needs to produce the loan funds so the dealership will have the funds to pay off the line of credit on that automobile. Often a ‘cash crunch’ is a primary reason for dealerships to go out of business.
Are there any regulations in the United States on buy here pay here dealership system?
Related finance companies are not regulated as strictly as banks by the Federal Reserve, rather they are regulated by the Department of Financial Institutions or Department of Commerce on a State level depending on the State. Regulations may include maximum interest rate, late fee amounts, grace periods, and so forth. Some of the companies that have started as RFCs have grown large enough that they became Industrial Banks which are FDIC Insured banks owned by non-financial institutions.
How to buy a car with a buy here pay here dealers?
Meet the staff of buy here pay here dealer and bring the following:
- Driver’s license
- Most recent paystub
- Utility bill in your name or lease agreement
- Down payment
Then, pick your used car and test drive the vehicle that fits your budget and needs.
Nowadays, some BHPH dealerships are about making car ownership accessible, simple, and delightful in India as well as a few other countries. Especially in a country where four wheels fuel dreams, less than two percent of young Indians who live in the USA are satisfied with the used car experience. The goal of a BHPH dealer is for the country to trust their method, belief in, and enjoy their cars. In this way, they aim to propel a billion dreams.
In the BHPH dealership, a customer sometimes has to pay a huge interest rate on their vehicle. In some cases, the interest amount comprises 1/3rd of the car’s actual value. Nonetheless, the dealer finalizes your monthly installments based on your income only. While with spinny, customers can now touch their dream car and drive it flawlessly. And probably this is the main benefit of this auspicious service. At BHPHNear, we strive to maintain our position as an industry leader by providing you with listings of the best dealerships around and tools that allow you to select a location that fits your criteria and lifestyle.
