When your credit is lacking and you don't have much of a chance of getting financed for a vehicle in the traditional way (either through a finance company or bank), a buy here pay here lot like Autobank of Kansas City can be a lifesaver. Even though committing to a buy here pay here loan to obtain a vehicle you need is a good solution for a lot of reasons, there are some pretty hefty misconceptions that you should get out of the way if this is something that you think could work for you.
Misconception: Buy here pay here lots charge major down payments.
Fact: The amount that you will have to pay for a down payment will depend on the lot you visit as all will have a different requirement. In fact, there are some car lots that will not require much of a down payment at all and will allow you to basically just start out by paying your first payment for your vehicle. Many will also accept your old vehicle as a down payment, which is a good idea if you are just looking to get something better than what you already have. No matter where you go, most lots will work with you to come up with a down payment option that will work with your budget.
Misconception: Signing up for a buy here pay here loan means you have to make payments every week.
Fact: Buy here pay here loan terms can vary from place to place. Some lots do break down a monthly payment into weekly terms to make the payments easier to manage. However, this is rarely a required payment structure, but instead a choice that is based off of your own income flow and pay periods. In most cases, you will have a monthly payment just the same as you would with any other lender.
Misconception: Buy here pay here lots are quick to repossess your vehicle for nonpayment.
Fact: Even though the financing is handled by the car lot, they do still have to follow the state laws regarding repossession, which can vary greatly from state to state. In general, a lender cannot repossess or seize your vehicle unless the terms of the initial loan contract are not met. For example, if you sign a contract at the onset of the loan that states you must carry full coverage insurance, the car lot can choose to repossess the car if they are notified that you lose adequate coverage.