What are buy-here, pay-here car dealerships?


Quick Answer

Buy-here, pay-here car dealerships are car lots that extend a direct line of credit to auto buyers rather than going through a financial institution. The interest rate on an auto loan from a buy-here, pay-here car dealership is often higher than that of a traditional auto loan.

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Full Answer

Buy-here, pay-here auto dealerships are one of few options available to auto purchasers with poor credit or no credit history. An auto dealership may set up a buy-here, pay-here arrangement for a buyer whose loan application wasn't approved after the dealership already approved the buyer for the vehicle. Direct lending is more risky for a traditional auto dealer than for a buy-here, pay-here lot, which usually purchases cheap used cars and fixes them on-site for resale.

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