Buy Here, Pay Here (BHPH) is a car financing model that differs from traditional bank or credit programs. It is designed for buyers who may not qualify for conventional auto loans due to a low credit score or lack of credit history.

The main idea

Unlike the standard approach, where a car is purchased from a dealer and financed through a bank or credit institution, in the BHPH system the dealer acts as both the seller and the lender. The buyer literally “buys here and pays here”: all payments are made directly to the dealership.

Who is BHPH for

This model is most often used by people with poor credit history. BHPH dealers typically do not require a strong credit score and usually do not check credit reports as strictly as banks. This gives individuals a chance to buy a car when they would otherwise be denied financing.

How payments work

Payments under this system are often scheduled weekly or biweekly instead of monthly. Payments may be made in person at the dealership or through online services. In some cases, dealers install special devices that can disable the car if a payment is missed.

Pros and cons

Advantages:

• Opportunity to purchase a car with poor or no credit history.
• Simplified approval process.
• Quick transaction approval.

Disadvantages:

• Higher interest rates compared to bank loans.
• Limited selection of vehicles (often used cars).
• Strict penalties for missed payments.

The role of BHPH in the market

Despite the risks for buyers, BHPH remains an important segment of the auto market. For many, this system provides a real opportunity to obtain a vehicle that is essential for work and daily life.