Illustration by Andy PottsAutomobile and Driver
From the February/March 2021 problem of Automobile and Driver.
For the roughly 2.6 million People who purchased automobiles from them in 2019, buy-here, pay-here (BHPH) dealerships are each a lifeline and a scourge. These used-car heaps act as each supplier and lender, catering to clients with credit score scores beneath 620, a historical past of constructing late funds, or a repossession or chapter of their previous.
In alternate for financing these dangerous clients, BHPH heaps cost above-market costs for his or her automobiles together with rates of interest as excessive as 29.9 %.
In 2019, BHPH clients defaulted on nearly 4 out of each 10 loans. For the sellers, who can repossess and resell the identical car again and again, that is merely part of doing enterprise. For the hard-up individuals counting on these vehicles, although, it is one other snare within the poverty lure. They’re left poorer, with out transportation, and with one other black mark on their credit score report.
Kelley Blue E-book says a 2012 Chevrolet Cruze with 105,000 miles ought to promote for roughly $6400 to $8000 at a standard dealership, but a BHPH buyer might pay greater than $20,000 over the lifetime of the mortgage for a similar automotive. This is how one used automotive can value two wildly totally different quantities relying on the place it is bought.
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