If your credit could use a little help, you’re not exactly alone. Many of us have found ourselves in that position at one time or another during our lives. Unfortunately, when it comes time to buy a car, that can mean putting two or three times the interest rates into your auto loan calculator when you’re figuring out what your payments are going to be.
Most automobile dealers offer high risk financing options. They’ll cost you more, but as the financing department will be quick to point out to you: you put yourself in that position, and the only one who can get you out of it is you.
For those who can’t even get high risk financing at a dealership, there is still an option: a buy here/ pay here dealership (also known as “buy here/die here”). It isn’t an attractive option, but at least it offers you the opportunity to buy a car when you need one. Here are some things to consider when buying a car from one of these dealerships:
- They can take your car back if you miss a payment. Most of them will be reasonable with you as long as you communicate with them, but don’t ever assume. Don’t be late with payments, and if you do have to be late due to unavoidable circumstances, let them know in advance.
- Your interest rate will be high. Typically, buy here/die here car lots charge up to double the interest rates other financing options offer. Go ahead and type in the figures into an auto loan calculator and take a good look at how much you’re going to be paying. It’s definitely enough to make you want to repair your credit.
- Make sure they report to the credit agencies. Speaking of repairing your credit, make sure that any dealer you buy from reports your payments to the credit agencies. They don’t have to, and many of them don’t. Ask about this before you buy the car. If you’re going to end up paying two or three times what a car is worth, you might as well get credit for making your payments on time.
- Some dealerships offer a deal on maintenance. Let’s face it, if you’re buying your car at a buy here/die here lot, you don’t have a lot of extra money to give to the mechanic. Some car lots will let you bring your car in to their shop and will add the cost into your payments, allowing you to pay for it over time. Of course, like buying the car in the first place, you end up paying more, but at least you don’t have to give the car up.