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Buy Here, Pay Here

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  • I financed my first car when I was still 17. The lot owner figured why not, since I had already bought two cash cars from him and the note wouldn't end until I was 18. $300 down and $50 a week, total of $1300, for a 1975 Torino. I paid it off when I left for school, and he mailed me the title. No problem. Except the car burned to the ground before I got to school. Tires were to blame, I should have changed the front ones before taking a 900 mile trip at 75mph+ through Texas, New Mexico, and Colorado to get to Wyoming. Tough roads.

    I financed another car when I got to Wyoming. Parents took me up there and bought me a $300 1980 Caprice to get me by. Caprice overheated badly, still ran, but I couldn't rely on it to deliver pizza. So I put it and $300 down on a 1979 Chrysler LeBaron. Paid it off and traded it for a 1985 Olds Delta 88, cash deal, kept it for awhile.

    I financed my next car at a BHPH in Marion, Ohio. 1980 Buick Electra. $300 down, $50 a week, it got me around for a month until the starter locked up and caused a fire under the hood. Dealer took it back, no questions asked, and put me in a 1985 Dodge Charger hatchback. A month later my Dad co-signed a bank note on a nicer car (1993 Dynasty) and I gave the Charger back to the lot. No problem, they didn't care, they'd sell it to someone else. They were working on rewiring the Buick when I dropped the Charger off.

    Next BHPH lot I bought from was my wife's Lumina this past February. We're still paying on the car, had to make a couple minor repairs, but it's doing fine. We put $1300 down on it and financed around $3400 on a $3995 car at $75 a week. Pretty decent deal for a clean, reliable, well-kept 8-year old sedan with 118K on it and a dent in the left front fender.

    And finally, a couple hours later, two blocks over, I bought a 1997 model Lumina for $4995 and $700 down and $65 a week. I only got it so we'd have two good cars, but this one didn't turn out so good and wouldn't pass inspection. Because of the laws in Texas regarding emissions, the dealer either had to fix it to pass or buy it back. Instead, the dealer conveniently "lost" our last payment check, repossessed the car, and sold it to some other unlucky sucker. No problem. I don't have to worry about that car anymore, and because of their attitude and the quality of the cars on their lot, I'm not buying from that lot again. I even sent a friend to buy a truck from them at one point, and it turned out to be a real pile. They pulled the same trick, edited their computer to no longer show the last payment, repossessed the truck, and left him hanging.

    Reminds me...MAKE SURE you get a receipt every time you make a payment. Might help in small claims court. And if it wasn't over a measly $700 down payment and a few biweeklies, I'd be suing that dealer. Much cheaper to just let it go.

    I don't want to BHPH finance another car, but we may be stuck doing so when we get a minivan soon. Have kid #6 on the way. Oldest stays with her father, so we have to have 7 seatbelts and the Lumina isn't going to cut it. We're trying to work with the selling dealer to trade up, but they're only offering $600 versus the $1900 we owe, and that's wrong. Hoping to sell the Lumina outright to someone willing to wait while the lien is released from the title. I'm sure we can get $1900 for it at the very least, and start fresh on the minivan, whether it's from the same BHPH lot or not.

    Some BHPH lots are horrible. I know of one lot on the south side of town who has GREAT cash prices on their cars. One example would be a car we looked at back in February. Gray 1999 Chevy Lumina, 130K, cash price was $2799. Sounded great and if we could have financed that with half down and that price, we were all for it. But the finance price was $5799!!! They insisted on making an extra $3000 over an 18 month note instead of taking half now and 4 or 5 months at $300 a month. They would have had their money in much less time our way, and there is no reason to mark up a car to double the asking price to allow financing.

    And some BHPH lots are great, like the lot we bought my wife's Lumina from. No ridiculously priced sleds, no major mechanical gremlins, and they didn't even check her credit (it's BAD, and mine is even worse!!!). We've been able to pay by cash or check. I do wish they'd offer credit card payments so we could call in our payment like I did with my other BHPH Lumina that got repo'd.
  • "make on my investments"

    It's evident that the financial means of most of the posters here, does not allow for a discussion of BHPH lots from a consumers point of view.
  • bobstbobst Posts: 1,783
    Because your investment income is taxed but the interest you pay on a loan is not tax deductible.
  • qbrozenqbrozen Posts: 17,274
    eh, we just got BRIEFLY sidetracked based on one comment.

    '13 Stang GT; '86 Benz 300E; '98 Volvo S70; '12 Leaf; '14 Town&Country

  • qbrozenqbrozen Posts: 17,274
    That's a good point, but just means you need a little spread in the numbers. The rate on both my current vehicles is still well below even a decent money market or savings account rate, even after taking taxes into consideration.

    '13 Stang GT; '86 Benz 300E; '98 Volvo S70; '12 Leaf; '14 Town&Country

  • bobstbobst Posts: 1,783
    If your interest rate is that low, then you paid too much for your car. You could have bought it cheaper if you had paid cash.
  • qbrozenqbrozen Posts: 17,274
    I just went back to read my post. I did say "financed," but that wasn't completely true. The Honda is leased. The Pacifica we got during the "employee price for everyone" deal, so it was as cheap as it was going to get. And the prices before and since that event have been higher (i watch the prices paid forums religiously). The Pacifica is just more "creatively" financed. Its sort of a smartbuy thing. And I'm very glad we did it that way because we are probably not keeping it.

    '13 Stang GT; '86 Benz 300E; '98 Volvo S70; '12 Leaf; '14 Town&Country

  • I've had pretty good luck with the few times I've done business with BH PH places. I'm not counting when I've walked in and bought an older car for cash.
    I dealt with one in Marietta, GA called Georgia Motors. They were a bit over-priced if you had to finace, but not insanely so. I called in advance once when I was having some money issues and got them to wait about a week and a half on a payment. They were very pleasant and very open on any issues the cars had. After all a $2000 dollar car WILL have problems. I know this, I'm a good mechanic, just tell me what to expect out of it and I'm okay with that. I'd cheerfully do business with them again if circumstances dictated and we hadn't moved to Louisville.
    As a basic rule of thumb: If the finance price is more than double what the car is worth...you may not wanna deal with that particular lot. There are a couple around here that are just horrible...
  • joel0622joel0622 Posts: 3,302
    Nothing wrong with a BHPH lot. They do a good business and provide a service to those who need it, and to those who actually don't need it but enjoy doing business that way.

    Biggest thing a BHPH guy is looking for is a car that will out run the note, and they never let you get one paid for. When you come in to make your third to last $50 weekly payment they trade you into something else.

    I have learned one thing on this web site, allot of people look at things from only there point of view and not from others. What I mean is,

    Just because you can pay cash does not mean every one can.

    Just because you can afford to keep a $3000 emergency fund in the bank in case of repairs does not mean every one can.

    Just because you did not need GAP insurance does not mean every body doesn't

    Just because you qualify for a better rate then 19% does not mean every body does

    Etc, Etc,

    I am not saying any one person in particular, that just seems to be the general theme some times.
  • occupant1occupant1 Posts: 408
    So since most of these places don't care if you pay for the car, as long as they got their down payment and they got the car back, I'm thinking they're acting as rental agents for beaters!

    I figure it this way. You pick out a nice low mileage '99 Taurus, it's $700 down, $75 a week, 78 weeks, total price $4995+ttl+interest, comes to $6400 altogether. You'd be making payments on that car, and say the transmission gives out after a few months. Now you have choices.

    One, you can fix the car out of your own pocket ($2000), continue making payments and end up spending $8400 for a $2000 car over the course of the remaining 12 months of payments.

    Two, you can have the dealership fix the car (probably with a junkyard transmission) and tack the $2000 onto your payments and you end up spending more like $8700 for the car with the added interest.

    Three, you can tell them to stick it, you're only out $1675 thus far, and you take a few hundred and go to another lot and get another car. They don't check your credit, so who cares, right?

    That car lot had a lot less than $1675 in the Taurus anyway. If the down payment was $700, that's probably about what they had in it. They can scrap the car and still be way ahead, or drop in another transmission from one of the dozen Tauruses they have sitting out back with various broken parts, and sell it to someone else. Or sell it as a mechanic's special for cash. Or fix it right and sell it with a higher down payment. They've made their money from the down payment, so every payment you make is profit to them.

    So those of us (my dear wife) who simply MUST have a newer model car, but don't have any credit worth speaking of, we just head to a BHPH, pick out something she likes, and if it lasts to the end of the note, terrific. If it craps out, no problem, we go find her something else. If we can't make the payments, it gets repossessed, and we save up for another down payment. If the note tries to switch us to another car, we consider it, as if it were another car purchase, which it kinda is.

    The key to BHPH *IS* finding a car that will last to the end of the note. My new motto is that "GM cars run bad longer than most cars run at all!" So Aleros and Malibus and Impalas and Grand Ams and Luminas are what we look for.

    The second key to BHPH is to get the lowest down payment and weekly payment possible, without getting overcharged for the car itself. Examples:

    1996 Lumina, $500dn, $50/wk, asking price $4995
    1997 Lumina, $700dn, $65/wk, asking price $3995
    1998 Lumina, $1200dn, $75/wk, asking price $3995
    1999 Lumina, $1000dn, $75/wk, asking price $5995
    2001 Lumins, $1000dn, $75/wk, asking price $8995

    If you can handle the down payment, that '98 is the best deal of those four. The '99 is overpriced compared to the '98, and unless the condition of the car is light years better, the '98 is probably fine. The '96 has cheap payments, BUT look at the asking price, a grand more than the '97. That 2001 looks the same as the '99...UNTIL you look at the asking price. And yes, all five of these are cars we looked at before settling on the '97 and '98 models last year.
  • jlawrence01jlawrence01 Posts: 1,828
    I figure it this way. You pick out a nice low mileage '99 Taurus, it's $700 down, $75 a week, 78 weeks, total price $4995+ttl+interest, comes to $6400 altogether. You'd be making payments on that car, and say the transmission gives out after a few months. Now you have choices.

    Or you can go to Carmax and pay $8500 for the vehicle.
  • kyfdxkyfdx Posts: 28,434
    Geez... If I can afford $75/week, I'm just going to lease a new Accord.. :surprise:

    MODERATOR
    Prices Paid, Lease Questions, SUVs

  • geo9geo9 Posts: 739
    If you have NO cash or credit or are a "credit criminal"
    (thanks Terry aka R Royce) the BHPH lots are your only
    way to go !

    Those BHPH lots in Fl. sure made a ton of $$$$.........
    Sell a car that anyone with cash could buy for $2000
    to a person with a little cash and/or no credit for
    $1000 down and $60 or so a week for a YEAR.........

    You figure MOST can't or won't pay after several weeks.
    The car gets popped and resold to some other poor sap
    for the same deal...................
  • joel0622joel0622 Posts: 3,302
    Old saying of "You reap what you sow" comes to mind
  • Actually this is not how the system works at all. The first place where you are misguided is in what you think the dealer paid for the vehicle. Just because Kelly Blue Book or NADA tells you the "value" of the vehicle does not mean that is what the current market value of the vehicle is or what the dealer has to pay in order to get the vehicle. In most parts of the country your down payment merely covers the cost of t.t.&l on the vehicle. This isn't the 1970's and vehicles don't cost what your granpa paid. You are correct that you can take your repair money and buy at another dealer because they do not check your credit but the BHPH dealer you originally bought from may report to your credit and if you can suffer out what you think to be your cruel and unusual punishment of a car for the contract term that you agreed to, then you might actually be able to get into a better car the next time and take yourself out of this cycle. But I guess in the long run it is all a matter of your personal value system, how you were raised and whether you think everybody owes you something or if you are going to take responisibility for the bills you didn't pay in the first place the got you into this situation.
  • lemkolemko Posts: 15,162
    ...exhorbitant payments on a car on which you already hold the title. Here's an article from the Philadelphia newspaper on the evils of getting a car title loan :

    http://www.philly.com/philly/classifieds/cars/20080302_ap_paydayloanfoesaimatcar- - titleloans.html
  • qbrozenqbrozen Posts: 17,274
    Bruce Johnson is trying hard not to lose his 2000 Dodge Neon. He and his wife, Helen, took out an $800 loan from Fast Auto Loans Inc. near Richmond. They've paid three payments , $533 , and still owe more than $900.

    Johnson is paying about $40 per month on the principal and about $200 in interest. If he stops, he'll lose the car. If he continues, he'll sink more money into the car than it's worth.

    "I'm paying $5,000 for a car that cost me $1,300, and if I get sick and miss a payment or can't make a payment they're going to come take my car away," Johnson, a 67-year-old retired carpenter, said in a telephone interview.

    Johnson now wishes he'd just gotten a payday loan. At least then, he says, he would have known what he owed. Either way, he said, legislators need to protect families like his from predatory lenders.


    Man, that just burns me up. Here a poor blue collar worker just trying to make ends meet is forced at gunpoint to take a handful of cash and hand over his car keys. When is the government going to step in and stop this victimization?!

    Reminds me of the time a banker came to the house and held a knife to my wife's throat while I signed documents to refinance our home. Anyone know a good lawyer that can help me out?

    '13 Stang GT; '86 Benz 300E; '98 Volvo S70; '12 Leaf; '14 Town&Country

  • tidestertidester Posts: 10,110
    When is the government going to step in and stop this victimization?!

    Not to sound unsympathetic, but the numbers in that article just don't add up.

    First, the current balance on the loan is greater than the amount borrowed ($900 vs. $800). How is that possible?

    Second, the article claims Mr. Johnson is paying $240 per month ($20 principal + $200 interest) but has already made three payments totaling $533 which works out to $177.78 per month. Which is it, $240 per month or $177.78 per month?

    Finally, if he's paying $200 interest per month on a loan with a balance of $900 then his monthly percentage rate is about 22%. which adds up to an astonishing 264% annual percentage rate. Even a predatory lending organization is required by law to inform the customer what the APR is along with the total amount that will be paid over the term of the loan. Mr. Johnson had to have been aware when he signed on the dotted line that the total cost of this $800 loan would be over $5,000.

    The government should certainly go after predatory lenders. However, I suspect the author of the article botched it and just didn't get her facts straight. And if the 67 year old Mr. Johnson was either completely oblivious to the tems of the contract into which he entered or was unable to coherently convey the facts to the author of the article then perhaps he ought not be driving in the first place.

    tidester, host
    SUVs and Smart Shopper
    .
  • isellhondasisellhondas Issaquah WashingtonPosts: 17,677
    Thank you for doing the math I wa about to.

    No, this doesn't add up.

    It is a sad story and I feel for this guy especially at the age he is.

    Still, he put himself in this position either by not paying his bills or making some horrible decisions.

    This is when family support is needed. Hopefully this may be available to him.
  • bolivarbolivar Posts: 2,316
    In my state it could be a pawn shop loan.

    There are restricted to something like 35% PER MONTH interest rates.
  • mitzijmitzij Posts: 612
    I hope I'm never in a situation where getting a payday loan or mortgaging my car sound like good ideas. :sick:
  • isellhondasisellhondas Issaquah WashingtonPosts: 17,677
    Yeah, me too.

    Sometimes it's not the person's fault. A job loss or medical emergency can put a person over the edge.
  • qbrozenqbrozen Posts: 17,274
    You didn't miss my sarcasm, did you?

    '13 Stang GT; '86 Benz 300E; '98 Volvo S70; '12 Leaf; '14 Town&Country

  • blueiedgodblueiedgod Posts: 2,803
    Not to sound unsympathetic, but the numbers in that article just don't add up.

    I think you missed the sarcasm. He even said at the end that a mortgage broker came over and put a knife to his throat to refinance the house.... (sarcasm)
  • tidestertidester Posts: 10,110
    No, I did not. :)

    tidester, host
    SUVs and Smart Shopper
  • qbrozenqbrozen Posts: 17,274
    I didn't think so.
    Just checking.
    :)

    '13 Stang GT; '86 Benz 300E; '98 Volvo S70; '12 Leaf; '14 Town&Country

  • oldfarmer50oldfarmer50 Posts: 6,402
    I recently saw an ad on TV that said they would loan anyone $5750 "just because we trust you". In the small print that flashed for a nano second it said the interest rate was 99%. :cry:

    2009 PT Cruiser, 2008 Eclipse, 1995 Mark VIII, 1988 GMC Van

  • joel0622joel0622 Posts: 3,302
    recently saw an ad on TV that said they would loan anyone $5750 "just because we trust you". In the small print that flashed for a nano second it said the interest rate was 99%.

    Wow, no one coud ever afford that loan. If they could they would not have to borrow in the first place.

    Wonder how they get around state usory limits :confuse:
  • the_big_althe_big_al Posts: 1,073
    hmmm... well I agree with you "sort of" about throwing money away on a depreciating assest, but...... you need to drive, and it takes about 10k to get a decent reliable vehicle - you could drive a Hyndia Accent however - and so I don't think that spending 10k on a depreciating asset is "throwing it away". I look at it like an appliance. You buy a toaster for $15 dollars use it till it breaks and then buy a new one. You buy a T.V. for 200 bucks, it breaks in a few years and you buy a new one. A car I view almost the same way, although if it breaks I will definately not just run out and buy another - it depends on what breaks and how much I will have to spend to keep it road worthy.

    Right now I own a vehicle with 100K on it. By the time it was all said and done I paid about 17K for it. I financed it for 5 years 4 years ago, and paid it off in 3. I think the original price was 16K, but with added interest I think it came to about 17K. These are rough numbers here, I really don't know. Anyway, my point is, I have now put over 75K miles on it in the last 4 years (it had 25K when I bought it). I have had a few things go wrong, but all I think I have only spent about $500 in repairs in the last 4 years and 75K miles. I am about to spend another 1-200 in repairs next week. This is not including oil changes and tires and brakes of course. Anyway, my point is, I plan to drive this vehicle till the wheels practically fall off. I could be theoritcally driving it another 4 or 5 years putting hopefully the total mileage close to 200K. That would be nice. If I can get that much out of the vehicle, I would consider that original 17K money well spent. Sure the vehicle probably won't be worth much more than 1000 by the time I am done with it, but I sure was able get it's worth out of it....
  • the_big_althe_big_al Posts: 1,073
    Also I might dare say as I don't mean to offend - but if you can save 2K a month, why not save the 10K over the next 5 months to get 10K down payment and pay off the rest of the 5K over the next year? That would certainly start rebuidling your credit.

    Or is the 15K car not a Mercedes and therefore you don't want to be seen in that particular car? I mean even the above mentioned Taurus would do you well. It's cheap, reliable, and will help you rebuild credit. It aint a flashy car, or a "cool" car, but what's more important? Looking cool in a borrowed Mercedes or, or having a solid credit history that you worked hard to build?
  • the_big_althe_big_al Posts: 1,073
    Now that we are way off topic of the BHPH dealers, I will try and get back on topic.... :D

    There are a ton of them here in PHX Az. I'm not quite sure I would trust them and I have always had a bad feeling about them. I have never had an experience with one, so I don't know. The last 3 cars I have purchased have been through dealerships - one was used sight unseen which I will never do again, but it was a family business and I was desperate. Even my uncle tried to tell me not to buy this particular vehicle but it was what I wanted so he got off the auction for me. My next vehicle was a scant 1 1/2 years later from a dealership that took the wreck I had previously bought off my hands. It was also used and is still on the road 4 years later and still going strong. My last vehicle was bought new 2 years ago, and after experiencing it once, I think I will buy used again next time around. It was overall a better experience - as long as I can find the vehicle I want which can be difficult when buying used.

    I don't think I will ever see the need for me to use a BHPH place. But I do believe they fill a market need for those that can't get the financing from a dealership or a bank. Not that my credit is perfect, I have worked hard to get it to where it is now and had to pay a fairly high interest rate on the 2nd vehicle. (The first was financed through mom and dad and I just made the payments :)), but after it was paid for it really helped the credit and when I bought the new one a couple years ago, the dealership didn't even flinch. The rate still wasn't fantastic, but it was better and they didn't have to hunt down a lender like the first time....
  • the_big_althe_big_al Posts: 1,073
    so you have a hard time throwing 10K of your hard earned cash into a car but... you have no problem driving your fiance's Mercedes that either she/he (you never mentioned gender so I want to be PC :D) or her/his parents paid probably at least 3 times that with thier hard earned cash? And they don't even get to enjoy it? I think there is something wrong with that picture. I will put your words you said back into your mouth... suck it up, take the advice that has been given and get your own set of wheels that you can be proud to say you own.
  • the_big_althe_big_al Posts: 1,073
    I have a buddy who has bought his last 2 cars from a BHPH place and had a pretty good experience. Anytime he knew he was going to come up short, he would call them up and let them know and then he would also let them know when he would be able to make the payment. They were always cool with that....

    Also - is the BHPH lot reporting your credit so that you can repair your credit? Hopefully you are making all your payments on time and if the dealer is making reports that will help repair your credit.
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