The Value of Working With a Buy Here Pay Here Dealership
How much power does your credit score have in your life? Despite only being a three-digit number, your credit score significantly impacts how easy it is to secure financing and make big purchases, like buying a house or obtaining a loan. With a low credit score, these purchases are a little trickier and a lot more stressful, particularly when it's time to buy a reliable vehicle. The situation also poses a problem because, without a car, you risk missing work, losing your job, and eliminating your only source of income needed to pay your bills on time. Yet, your low credit score makes it nearly impossible to find a lender willing to give you a second chance.
Paradise Motors knows the value of second chances and is proud to be the leading buy here pay here car lot in Waverly MI. Financial struggles can affect anyone, but we believe those struggles shouldn't prevent you from having the opportunity to rebuild from behind the wheel of a reliable car, truck, or SUV. As a buy here pay here dealership, we're here to break the cycle and show you how a car loan can help you rebuild and get back on the road to financial freedom.
How Buy Here Pay Here Works
You have three options when it's time to purchase a vehicle. You can pay cash, sign a lease, or finance the purchase by taking out a loan. Signing a lease is like renting an apartment; you're paying to use the vehicle for a period of time and are responsible for keeping it as close to its like-new condition as possible. Paying cash is ideal because it eliminates any monthly loan payments, but it's far from realistic. Most people don't have access to that much cash, and even if they do, it's often not practical to drain their savings account for such a large purchase.
Financing is the most popular option, but even that can be problematic for individuals with low credit scores. Although dealerships often tout that they work with all types of credit, their lenders generally have strict parameters and only work with individuals with high credit scores because the risk is minimal. Unfortunately, individuals with low credit scores haven't proven their creditworthiness or that they can responsibly handle their debt, making them less than ideal borrowers for traditional lenders.
Luckily, that's not your only option. Buy here pay here dealerships like Paradise Motors streamline the process by serving as the dealer and the lender. Instead of relying on a financial institution to decide your eligibility for an automotive loan, we set the standards and determine whether it's critical to check your credit score before your purchase. In most cases, your credit score doesn't impact your ability to buy a vehicle with a buy here pay here dealership like ours.
A Nontraditional Approach
You find the car of your dreams at a traditional dealership and are ready to start the purchase process, which begins with the dealership checking your credit. This hard inquiry can negatively impact your credit score, causing it to drop a few points before you're even approved for a loan. With a buy here pay here dealership, you usually don't have to worry about this impact because most don't run a credit check. So, how do they determine your eligibility? Buy here pay here dealerships flip the process and take a nontraditional approach.
Instead of shopping the entire inventory to find the perfect model only to discover you don't qualify for financing, buy here pay here dealerships start with the most important aspect; your finances. The process begins once you sit down with a member of the sales team to set your budget, verify your income and proof of residence, and determine the loan amount you qualify for with the dealership. By starting with your finances, a buy here pay here dealership saves you valuable time and sets you up for success.
Once you know the value of the loan you qualify for, shopping for your next car, truck, or SUV is easier and more enjoyable. The dealership will walk you through the models within your price range, eliminating the hassle of shopping at multiple dealerships or frequently revisiting your budget to determine if you can afford to spend more. At a buy here pay here dealership, the hard work is done first so that you can confidently say "yes" to the best vehicle for your driving and budget needs.
The Buy Here Pay Here Impact
Your credit score determines your creditworthiness and tells a lender the risk associated with lending you money or approving the loan. Lenders mitigate this risk by evaluating your credit score and charging a comparable interest rate. For example, a high credit score is a lower risk and yields a lower interest rate. In contrast, a low credit score is a higher risk and comes with a higher interest rate to minimize that risk.
Working with a buy here pay here dealership doesn't exclude you from higher interest rates. Realistically, signing a loan with a buy here pay here dealership typically comes with an interest rate as high as, if not more than, 20%. This is significantly higher than the average interest rate, which ranges between 3.5% to 5.3% for excellent credit scores. So, how can this be helpful?
While you will likely pay a higher interest rate at a buy here pay here dealership, there are a few things to remember. First, unlike other dealerships, a buy here pay here dealership makes purchasing a reliable vehicle possible, putting you back on the road and capable of getting to and from work. Without this opportunity, financing your purchase is nearly impossible if your credit score is low or your credit history is nonexistent.
Second, a buy here pay here dealership can help you break the cycle of bad credit. When you work with a buy here pay here dealership, you eliminate a third-party lender and make payments directly to the dealership. This can have a positive impact in two ways. First, if the buy here pay here dealership reports your payments to the major credit bureaus, every payment made on time can help improve your credit score. Alternatively, if the dealership doesn't report your payments to the credit bureaus, late payments or defaulting on the loan will not negatively impact your credit score or creditworthiness.
Things to Consider
Buy here pay here dealerships are often characterized as less-than-stellar alternatives for individuals with low credit scores that aren't eligible for traditional financing. However, dealerships like ours are actively working to change that. We provide every customer with the opportunity to get behind the wheel of a reliable vehicle they can afford and the chance to break the cycle of bad credit. We're in the business of giving second chances with buy here pay here loans.
As you shop for a buy here pay here dealership in the Waverly area, consider what a second chance means to you and how a reliable vehicle can put you back on the road to financial success one payment at a time. With no credit checks and a nontraditional approach to the car-buying process, buy here pay here dealerships recognize the value of your time and understand the importance of leveling the playing field when it's time to invest in your future behind the wheel. This makes buy here pay here dealerships critical to individuals looking to rebuild their credit and financially establish themselves without the overwhelm of the traditional, high-pressure car-buying process and the financial stress that accompanies it.