St. Louis, Missouri: A Look At Buy Here Pay Here Financing

Possessing a car and riding it around for work or for fun is a great experience. At least when it is your first car and the traffic is light. But even otherwise, car ownership gives you a certain sense of freedom and possession. However, there are some people who cannot purchase a car because they cannot get the loans for making the purchase. And they cannot get the loan because they do not have a good credit rating.

Credit Rating is the measure of the repayment capacity of an entity - a person or an organization. An entity with high credit rating or a good credit history is one who is seen to be reliable at repaying loans because of his good repayment record. Alternatively, this entity may be credit worthy because he has a great amount of assets. Sometimes it so happens that a person gets a bad name because of his inability or unwillingness to repay a loan, delay in repaying the loan, declaration of bankruptcy or spending more than the limits of the credit card. Many times this situation is a result of the force of circumstances and not due to mala-fide intentions of the borrower. In such a situation, it seems to be unfair to rob a sincere guy of some much-needed credit to get back in business.

This is precisely where buy here pay here car financing assumes significance. In this system the car dealer / seller arranges for the loan to make car purchases from him. Therefore the buyer purchases the car and makes the repayment to the same entity - the BHPH dealer. Such dealers work out the repayment capacity of the buyer and then offer him the cars within his budget. Therefore this system is also more pragmatic.

The best part of the BHPH system is that it provides credit to those with a bad credit history. Since the BHPH dealers have a system of reporting repayment behavior, it also gives a chance to the buyer to improve his credit rating and getting back in his groove. BHPH dealers are more used to working with those with a low credit rating and are, therefore, more flexible and more quick. The other side of this coin is the high interest rates due to greater risks involved in such transactions and the limited number of car choices available to the buyer.