Buy Here Pay Here in Nashville: What You Need to Know Before You Buy
If you’re shopping for a used car in Nashville and have had difficulty getting approved for traditional auto financing, you may come across Buy Here Pay Here dealerships. These dealerships can provide another way to purchase and finance a vehicle, but the financing works differently from a typical bank or credit-union auto loan.
Before choosing a Buy Here Pay Here vehicle, it’s important to understand how the financing works, what the vehicle will actually cost, and what questions to ask before signing an agreement.
Here’s what Nashville and Middle Tennessee car shoppers should know.
What Is a Buy Here Pay Here Dealership?
At a traditional dealership, financing is usually provided by a bank, credit union, finance company, or other third-party lender.
A Buy Here Pay Here dealership may provide financing directly or through an affiliated financing program. Instead of relying entirely on traditional auto-lending approval standards, the dealership’s program may consider other factors when determining whether a customer qualifies.
Programs vary considerably from one dealership to another, so don’t assume every Buy Here Pay Here dealer operates the same way.
Who Uses Buy Here Pay Here Financing?
Buy Here Pay Here financing may appeal to shoppers who have difficulty qualifying for conventional vehicle financing.
That can include people with limited credit histories, previous credit problems, or other circumstances that make obtaining a traditional auto loan more difficult.
Approval is not guaranteed, and each dealership establishes its own requirements.
How Much Down Payment Will You Need?
Down-payment requirements vary by dealership, vehicle, and financing program.
Before visiting a dealership, ask what you’ll need to bring and whether the advertised down payment applies to every vehicle or only certain vehicles.
More importantly, don’t evaluate a purchase based solely on the down payment. A low upfront amount doesn’t necessarily mean the overall transaction is inexpensive.
Look at the total cost of the vehicle and financing.
Understand the Interest Rate and Finance Charges
One of the most important parts of any financed vehicle purchase is understanding how much the financing will cost.
Before signing, review the interest rate or applicable finance charges, length of the financing agreement, payment amount, and total amount you will pay.
Two vehicles with similar monthly payments can have very different total costs depending on the amount financed and the financing terms.
Don’t Shop by Payment Alone
It’s easy to focus on whether you can afford a weekly, biweekly, or monthly payment.
But the payment doesn’t tell you the entire cost.
For example, a smaller payment stretched over a longer period can sometimes result in paying considerably more overall.
Before buying, make sure you know:
- Vehicle selling price
- Down payment
- Amount financed
- Interest rate or finance charges
- Payment amount
- Number of payments
- Taxes and fees
- Optional products
- Total amount you will pay
Look at the entire transaction before deciding whether it fits your budget.
Ask How and When Payments Are Made
Payment schedules vary among Buy Here Pay Here dealerships.
Payments may be due weekly, biweekly, semi-monthly, or monthly depending on the dealer’s financing program.
Ask exactly when payments are due and what payment methods are available. Some dealerships may accept online or electronic payments, while others may have different procedures.
You should understand the payment process before leaving the dealership.
Ask About Late-Payment Policies
Know what happens if a payment is late.
Review the agreement for information about late fees, grace periods if any, collection procedures, and other consequences of missed or late payments.
Don’t rely solely on a verbal explanation. The written agreement should explain your responsibilities.
Will Your Payments Be Reported to Credit Bureaus?
If improving your credit is one of your goals, ask whether payment activity is reported to one or more major credit bureaus.
Reporting practices vary.
Don’t assume that making payments on a Buy Here Pay Here account will automatically appear on your credit reports.
Check the Vehicle Just as Carefully as Any Other Used Car
Financing should not be the only consideration when choosing a vehicle.
Inspect the car carefully and take a thorough test drive. Check the tires, brakes, electronics, air conditioning, warning lights, interior, exterior, and other major systems.
When possible, consider having an independent mechanic perform a pre-purchase inspection.
A financing approval doesn’t tell you anything about the mechanical condition of the vehicle.
Ask About Warranty Coverage
Used vehicles may be sold with different types of warranty coverage—or without a dealer warranty.
Before buying, ask whether the vehicle includes any warranty and obtain the terms in writing.
If a service contract or other optional protection product is offered, review its price, deductible, covered repairs, exclusions, and claim procedures before purchasing it.
Ask About Vehicle Tracking or Starter-Interrupt Devices
Some financed vehicles may be equipped with GPS-based tracking technology, starter-interrupt technology, or other devices related to the financing arrangement.
If a vehicle you’re considering has such equipment, ask the dealership what is installed, why it is used, how it operates, and what the written agreement says about it.
Make sure you understand and are comfortable with the terms before purchasing the vehicle.
Compare More Than One Dealership
Being approved at one dealership doesn’t mean you have to buy the first vehicle you see.
Compare vehicles, prices, financing terms, warranties, and dealership policies when possible.
Nashville and the surrounding Middle Tennessee area have numerous used-car dealerships, so taking some time to compare your options can be worthwhile.
Read Everything Before You Sign
Never sign paperwork you don’t understand.
Before completing the purchase, review the sales agreement and financing documents carefully.
Make sure the written numbers match what you were told, including the vehicle price, down payment, payment schedule, financing costs, optional products, fees, and total amount you’ll pay.
Ask questions about anything that isn’t clear.
Keep Copies of Your Documents
After purchasing the vehicle, keep copies of all documents associated with the transaction.
That may include your purchase agreement, financing agreement, warranty documents, service contract, payment information, and other paperwork provided by the dealership.
Keeping these records together can be helpful if questions arise later.
Is Buy Here Pay Here Right for You?
Buy Here Pay Here financing can provide another option for people who may have difficulty obtaining traditional auto financing, but whether it’s the right choice depends on the individual transaction.
Don’t make the decision based solely on getting approved.
Consider the vehicle condition, selling price, down payment, financing cost, payment schedule, warranty coverage, and total amount you will pay.
If you understand the terms and the vehicle meets your needs and budget, you’ll be in a much better position to make an informed decision.
Find Buy Here Pay Here Dealers in Nashville & Middle Tennessee
Shop Nashville Used Cars helps shoppers explore local used-car dealerships throughout Nashville and Middle Tennessee.
Browse Buy Here Pay Here dealers, compare dealerships by city, and explore your options before deciding where to purchase your next vehicle.