Editorial Review
In a great article by online freelance author, Jason Lanier, the subject of buy here, pay here car lots was discussed in brief. There are many disadvantages for the consumer with this type of financing and Mr. Lanier makes a very clear point.
These types of car lots are very similar to pawn shops. They charge very high interest rates and the purchase price of the items, in this case being a vehicle, is much higher than what one could expect to pay and the normal retailer.
I would have to agree whole heartedly with Mr. Lanier on the topic. Consumers that have bad credit should look into other avenues of getting financing, rather than using in-house dealer financing options.
In-house financing does not refer to the typical loans that dealers get approved for consumers. What I’m referring to and what the article refers to, is they type of financing that is offered DIRECTLY by the lender. This is a case in which the dealer holds the title to the vehicle, until all payments are made.
While there may be some establishments of this sort that are good to deal with, the mass majority of them simply prey on the financial vulnerabilities of consumers and should be avoided.
For more information see the link referenced above that will take you directly to Jason’s article.
Bret Richards, Freelance Writer
Note: Although every dealer that is a part of the in-house financing industry is not “bad”, it is the basic business model of this industry that is troubling. It can be considered to fall within the same category as high interest credit cards and the like. Credit is a commodity in America and it is always a good practice to warn consumers of their potential vulnerabilities concerning credit issues.
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