3 Myths about BHPH Dealerships

Before making a decision to purchase a car, it’s important for every potential buyer to do their research and make sure they fully understand their choice. This is especially true when it comes to learning about different types of dealerships, financing options, and payment plans. There are some common misconceptions regarding the way that a buy here pay here dealership functions. Before dismissing a buy here pay here dealership, potential buyers should make sure that their decision has not been influenced by any buy here pay here dealership myths.

1. The BHPH Industry Is Not Regulated

This myth could not be farther from the truth. Just as with a traditional dealership and other consumer-oriented businesses, the buy here pay here industry operates based on a significant number of laws and regulations. These regulations exist at both a federal and state level, just as with traditional dealerships. They work to protect several aspects of the purchasing process, such as ensuring operational ethics and quality of a consumer’s purchase.

The following are just a few regulations by which the BHPH industry operates:
• Truth in Lending Act
• State Usury Laws
• Deceptive & Unfair Practices laws
• Used Car Rule
• Safeguards Rule
• Red Flags Rule
• Fair Debt Collections Practices Act

2. BHPH Lots Always Charge Excessive Interest Rates

Due to the nature of financing and lending, interest rates may be higher for those with poorer credit. This is also true with traditional dealerships and lending institutions. However, the idea that a buy here pay here dealership will always charge excessively high interest rates is simply not true. Some individuals perceive that a BHPH lot will charge 30 percent APR or higher. On average, BHPH dealers may charge between 10 and 20 percent APR, depending on a number of factors – primarily the purchaser’s credit. We work one-on-one with our customers to meet a financial agreement that all parties can agree on.

3. BHPH Dealers Charge Late Fees and Order Repossessions, While Banks Do Not

It is a common misconception that buy here pay here dealerships are the only types of dealerships that will enforce extra charges or repossessions for late payments. While buy here pay here dealerships may implement these rules, they are not exclusive to BHPH dealerships. Any financial institution is permitted to enforce these policies, and a vast majority of them will. It is also a myth that BHPH dealerships will charge late fees at a significantly higher rate than other lending companies.

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