Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
They cater to people who have few financing options so the cars tend to be poor quality, overpriced, and the financing terms are horrible compared to what you can get with conventional loans.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
44,570 posts, read 81,147,605 times
Reputation: 57793
If you are talking about a used car dealer, not new, they are usually a ripoff only suitable for people with no money and no credit. They will have a "finance company" that will give them approval over the phone at a high interest rate, and you will end up paying 3 times what the car was worth when you bought it by the time the load is paid off. Their vehicles come from auctions, they are the ones that the new car dealers took in trade, and were not good enough to be on their lot, or were bought outright from desperate people in need of fast cash.
Typically, if you can come up with the downpayment on a car with this type of lot...then you have enough to pay for it completely via a private party sale.
What many of these BHPH lots do is request enough down to cover wholesale/private party cost, so everything you pay them for the next 4,000 years is profit.
They are clever business people capitalizing on either naive or desperate buyers.
I wouldn't buy the poor quality cars they generally offer nor would I subject myself to their credit terms, but I have options. Most who buy at BHPH places have no other options. And the onerous terms are necessary because the default rate is astronomical.
Besides providing transportation for those who typically can't get transportation any other way, they also provide an outlet for older cars of marginal quality. Used car trade in values for "good credit" people are higher because BHPH lots exist.
Typically, if you can come up with the downpayment on a car with this type of lot...then you have enough to pay for it completely via a private party sale.
What many of these BHPH lots do is request enough down to cover wholesale/private party cost, so everything you pay them for the next 4,000 years is profit.
They are clever business people capitalizing on either naive or desperate buyers.
There is a reason the interest rates are so high, the people run a statistically higher chance of not following through in their loan commitment. I'm not sure if I'd call the rates unethical, but I understand why they're high. The individuals these lots cater to, as others said, do not have options to go to reputable dealerships...the cars they provide are typically substandard, and they care more about appearance than what you're buying.
I remember looking at a used 3 series bmw from one of these lots when I was fresh out of college...when I noticed a component that wasn't working properly during the test drive, the salesman said "well, what can I do to make this right for you?" my response was simple "fix it" and his quick response was "eh....what else, lets talk $$" that ended the test drive, and my interest in anything that dealership would offer.
I'm very glad I didn't purchase a car from them, and instead went with a reputable dealership, for a lightly used car. Good luck in your decision making process!
There is a reason the interest rates are so high, the people run a statistically higher chance of not following through in their loan commitment. I'm not sure if I'd call the rates unethical, but I understand why they're high. The individuals these lots cater to, as others said, do not have options to go to reputable dealerships...the cars they provide are typically substandard, and they care more about appearance than what you're buying.
I remember looking at a used 3 series bmw from one of these lots when I was fresh out of college...when I noticed a component that wasn't working properly during the test drive, the salesman said "well, what can I do to make this right for you?" my response was simple "fix it" and his quick response was "eh....what else, lets talk $$" that ended the test drive, and my interest in anything that dealership would offer.
I'm very glad I didn't purchase a car from them, and instead went with a reputable dealership, for a lightly used car. Good luck in your decision making process!
I totally understand and agree!
What I am saying is, at least some BHPH lots operate by requiring a high down payment. Say, $1500.
The thing is, that same $1500 will buy a decent vehicle on the private market, because the BHPH lot covers their initial investment on the downpayment. So even if the buyer never makes another payment, the BHPH lot has covered themself right off the bat. While the buyer can use that same chunk of money to buy a decent vehicle.
My opinions... they rape you on people with bad credit.
Also their cars, IMO are subpar usually. Think about it. Someone has a junker, feels like a waste to sell it so they trade it in. Car is barely looked over and accepted. Goes to auction, gets picked up by these places, they barely look over them and try to resell them. Sometimes they get screwed and they need to rework the car. Some of these places even have "garages" attached to them. I saw one place where you could see them doing engine swaps and more.
So in the older higher mielage car market, I would rather have a car someone owned and cared got them around as their own transportation rather then someone trying to make a buck.
BTW that goes for people who "flip" cars. They buy cars that need work cheap, do the work and try to sell it, even thought its not really a "tested" car.
Lol This is not for me!
A single mom i work with just went to one of these cars lots,when i told her not to do it!
She pick up a 2004 Toyota Solara with 148k for $6900.She and her ex husband walk away from there home destroying her credit
Last edited by hitman619; 03-25-2013 at 08:27 PM..
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
6900.She and her ex husband walk away from there home destroying her credit
