Why Do "Buy Here, Pay Here" Car Lots Always Want Down Payments?
One thing that you should be aware of, if you're looking at getting a vehicle from a buy here pay here car lot, is that the down payment that is requested is usually a dead giveaway.
What's the dead giveaway you ask?
It's gives away the approximate amount that the car is really worth.
Financing cars at buy here pay here places is one of the worst financial decisions that you can make in your life. There are better alternatives!
Buying a new car and the depreciation involved is bad enough.
Buying a USED car for two to three times more than it is worth and then it depreciating even further, well... I'm not sure that there are words that can describe how bad of a scenario that is. You'll pay so much more for a vehicle than it is ever worth at these types of car lots. This includes "Tote the Note" dealerships and the like.
When you make a down payment, you're typically paying what the dealer paid for the car. Sure, they advertise low down payments sometimes for certain clunkers that they have on the car lot. You can bet however, that they will be working you for cash as soon as you choose something other than the old beater that they used for a newspaper ad. The reason that they always want down payments is simply because they are financing the profit, not the car. Is it a real car loan anyway? No. All they do is agree to hold the title to the vehicle until you pay it off and then charge you interest on the profit!
So why do people even use these types of places for auto loans? It's because most people that have bad credit don't know that there are other alternatives to them that they can use to get a real auto finance deal. Using dealers that finance their own cars is not worth your time or your money. Plain and simple.
What's the dead giveaway you ask?
It's gives away the approximate amount that the car is really worth.
Financing cars at buy here pay here places is one of the worst financial decisions that you can make in your life. There are better alternatives!
Buying a new car and the depreciation involved is bad enough.
Buying a USED car for two to three times more than it is worth and then it depreciating even further, well... I'm not sure that there are words that can describe how bad of a scenario that is. You'll pay so much more for a vehicle than it is ever worth at these types of car lots. This includes "Tote the Note" dealerships and the like.
When you make a down payment, you're typically paying what the dealer paid for the car. Sure, they advertise low down payments sometimes for certain clunkers that they have on the car lot. You can bet however, that they will be working you for cash as soon as you choose something other than the old beater that they used for a newspaper ad. The reason that they always want down payments is simply because they are financing the profit, not the car. Is it a real car loan anyway? No. All they do is agree to hold the title to the vehicle until you pay it off and then charge you interest on the profit!
So why do people even use these types of places for auto loans? It's because most people that have bad credit don't know that there are other alternatives to them that they can use to get a real auto finance deal. Using dealers that finance their own cars is not worth your time or your money. Plain and simple.
