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As a potential used car buyer, are you familiar with all the different ways you can finance a used vehicle? The more traditional financing is through a third party, that’s not in business with the dealer. This might be a credit union or savings and loan. Generally you have to have decent credit or an acceptable co-signer.

But there are other financing options out there in the vast used car universe that are more creative so they can finance people even thought they man have credit that’s not stellar. In fact their credit may be non-existent or very poor.

One example that provides this type of credit is called buy here pay here lots. These buy here pay here lots are operated by used car dealers that function within a network of dealers who participate in the buy here pay here car program in the US and Canada. The program is designed to assist those buyers who really need a new used car but can’t afford to buy one using traditional vehicle financing.

There are pros and cons of buying a used car under this program

Buy here pay here lots means literally that you ‘buy here’ and most likely ‘pay here’ both directly at the lot. This financing program is nicknamed BHPH. Under BHPH one of the options is to apply on line by filling out an online credit application. The credit application will be sent to participating dealers in your area who have the option of accepting or declining the application. When one of the dealers accepts the credit application, you will receive notification. You may then visit that dealer and pick out a car.

Another option under this program is that you visit a used car dealer that is a participating member of the program. They will have you fill out an application for credit before you begin looking for your new vehicle. This allows both you and the dealer to be able to decide exactly how much money you can afford to pay for a car. A disadvantage is that you may not be able to qualify for that special car you have already decided to purchase.

If you choose to utilize this program you really need to find out what happens if you are late making a payment. And since this is a ‘pay here’ deal, it means you will physically have to deliver your payment directly to the dealer. Generally you will need to have cash or a money order. If you feel you will be making a lot of late payments, you need to reconsider if you really need a new car at this time. Or accept the fact that the new car you buy will be a bit older than you originally planned.

The real pro of this program is that the dealer really wants to sell you a new car. Additionally, the dealer will most likely be willing to take your really old used car in as a trade in.