Buy Here, Pay Here

driftracer

They have to put some cha-ching down to get a BHPH car, usually from $750-1500 - the thing is that most people don't want anyone on their block thinking they don't have any money, even thought they DON'T have any money and their credit's wrecked. They'll take that $1000 cash and put it down on a $3,995 (sale price) shiny car with some rims, and pose around and impress their friends and relatives.

 

If they would just buy that $1000 car, maintain it and keep it a while, while saving that $200-300 in payments each month, in a year, they could pay cash for a $3-4k car...but they won't do that, because they have to pose. Neverending cycle...

lemko

That's if a roadworthy $1,000 car can be found these days. I recall a time when $1,200 bought a beautiful used car, but that was over 25 years ago.

 

For $1,000, I would try to find something like a 1977-90 Chevrolet Impala/Caprice. These cars are very tough as any cabbie could tell you. They are mechanically simple and easy to repair. Parts are cheap and plentiful. I bet you could find a decent example for $1,000 if you look hard and long enough.

 

Heck, if I'm poor and the whole neighborhood is poor, who am I looking to impress? If I were such a big shot, would I be living in the 'hood in the first place? I'll live with that $1K car and sleep well at night instead of fearing the landlord and/or repo man.

 

I wish to God schools would teach people the basics of money management. It might not eliminate poverty entirely but would alleviate a lot of the misery. The only ones who would suffer are "merchants of misery" such as title loan offices, rent-to-own stores, pawn shops, payday loan outfits, and many BHPH lots.

Kirstie_H

Let's be fair - not everyone who shops at a BHPH shop is a poseur. Many just need transportation, and others just happen to find a car there - I brought my own financing, and still had no hassles at a BHPH lot.

rroyce10

... **not everyone who shops at a BHPH shop is a poseur** ...

 

               Your right .. most BHPH stores can't stay open anymore unless the "bulk" (60/70%+) of their business is done on the retail side .. so if they are smart and want to continue in the business for longer than 20/30 months, they buy nice vehicles, keep the customer(s) happy and work off referral and some nice clean Ad's ..... like I said before, more and more BHPH stores have gone out of business in the last 2 years than any other time ... the sad part is, the guy who owned it, goes out stone cold broke ....

 

                              Terry.

jlawrence01

I don't think that I like the direction that this topic has taken - the implication that the BHPH customer more often than not bites off more that he/she can chew because they are living beyond their means because they want a nice set of wheels.

 

Quite frankly, there are a LOT of people in big houses who have to have THAT Lexus even though they really cannot afford it either. So what's different. Why would you expect that working blue collar people not aspire to the same things that people in middle management or above aspire to?

 

I am the only person that I know who couldn't care less about what I drive ... as long as I am not forced to ride in one of those $100k+ vehicles (read that to mean bus or train) or the famous SLE (shoe leather express).

 

I have been to one BHPH lot a few years ago in St. Louis. I went there to rent a beater for the 2-3 week gap period between the time that I sold my old beater and could take possession of my next car. They would not rent to me as I did not carry collision/comprehensive on my car at that time.

 

As for $1000-1500 cars, they are out there. Personally, I like Cieras, Cutlasses, Escorts and the simpler cars. Nothing with lots of electronics. Generally, I look at my friends who are selling their 100-120k miles vehicles and want to trade them in on a new vehicle. My offer doesn't look too bad to them after what the dealer has offered. Of course, at that price, a fistful of Benjis, cash on the barrel makes a very convincing argument of our intent to purchase. Or as I always say, "10-$100 bills in hand is better than the 12 or 13 that might come later.

driftracer

who uses a BHPH dealer is a poseur - my point is that if you can scrape up the $1500 to drop on a BHPH car, you could buy a cheap car and save the payment, buying a much more decent car a year down the road...keep saving, and after 3-4 years, you can pay cash or trade allowance for a new car or certified used unit.

 

I dislike the types of folks who have to have it now, regardless of their budget, danged kids are starving, but they have a nice ride - so many folks like that, it's a shame.

 

It's no different from the folks with good credit, but with maxed out credit cards and charge accounts, bigger house than they can afford, living beyond their means, just so they don't look "average" although they only make $50-60k a year.

 

And I'm sure folks who make $175k a year do the same thing, just with higher maxes on the cards and bigger houses.

 

In my observation, only 30-40% of BHPH customers are trying to something they're not - the rest just need a car.

rroyce10

... **Quite frankly, there are a LOT of people in big houses who have to have THAT Lexus even though they really cannot afford it either. So what's different** ..

 

                Truer words have never been said.!

 

             I have seen box loads of credit reports from folks in their $800,000+ homes, their $150,000 boats and their $90,000 car combo's, that couldn't buy steam off a hotdog if they lost their job in the next 60 days -- it's common .. sad, but common ...

 

                                Terry.

isellhondas

Some of these "big shots" are one missed paycheck from bankruptcy. I once had a Microsoft executive who made 150K a year. He had over 90,000 in credit card debt. He had five or six cards maxed out and he was making minimum payments. He couldn't understand why the bank turned him down. I had to explain debt to income ratios and I still don't think he understood.

 

Finally, I just told him. One bubble in his income and he would be insolvent.

 

He left in a huff but returned three years later to thank me for telling him the brutal truth.

 

He bought a Civic so it looks like lessons were learned.

cadillacmike

Have you tried CarFax?

 

Or, you could get friendly with a dealer's sales mgr, like I did and have them run car fax reports for you. I got the sales mgr at Ed Morse to run about a dozen CarFax reports on cars I was considering, most of which WEREN'T on his lot. I was nice and bought a car from him in the end though. ;-)

cadillacmike

I always ask question # 1 nowadays. On the other hand, I DON't want a bogus "gold" package (and am still trying to rub off the gold plating on the front grille badge of my 2000 ElDorado).

 

I don't know what "notes" are. Would you mean monthly (oops, I'm sorry, weekly) payments?

 

You notice that no one in the forum has actually bought a car from a BHPH?

cadillacmike

If they could get ahold of $1K, they would probably spend it before even getting down to the car dealer!

nvbanker

"You notice that no one in the forum has actually bought a car from a BHPH?"

 

Ahem, I have, many of them. When I was young, of necessity, like my first car, a 62 Ford Galaxie for $300 (Cash, my whole life's savings). Several more in recent years for my kids, since I have several friends in the business. I always keep some "junk" around so my kids leave my good cars alone.

 

Let's see, I have purchased specifically from BHPH dealers,

 

93 Ford Tempo - wasn't bad

91 Jeep Wrangler - very good car

93 Chevy Corsica - flood damaged, a disaster.

99 Chevy Lumina - Recon, used in my business.

88 Olds Delta 88 - $1,000 car for daughter

96 Infiniti I-30 - disappointing

 

Top price paid was $10,000 for the 99 Lumina, but that was in 99 too, it was a totalled rental car reconstructed. The airbag probably didn't work and it wasn't totally straight, but it ran, and is still running today for someone else. I lost very little money even on the flood car which never ran right. Of course, I admit, I never bought any of them on credit, paid cash for them, but those places are a good source for disposable cars that are pretty much depreciated out already. If they don't work out, you can throw them away if you have to. Perfect for your teenaged moron.

rroyce10

.... **You notice that no one in the forum has actually bought a car from a BHPH?** ..

 

           You don't know that, and Nvbanker makes a good point ...

 

           Just because you don't see a falling down sign and 20 rusted out hulks, doesn't mean that the big Caddy dealer down the street doesn't have his finance guys use a BHPH program for those that are "credit challenged" ......

 

                            Terry.

1racefan

"Just because you don't see a falling down sign and 20 rusted out hulks, doesn't mean that the big Caddy dealer down the street doesn't have his finance guys use a BHPH program for those that are "credit challenged" ......"

 

CORRECT - there are always ads on our local tv, as well as in the local dealer magazines that talk about having an on-staff "Credit Doctor", or "Credit Wizard", etc... that can help you get into a new car, regardless of your credit history. These are big, new car dealers that I am seeing these ads for.

driftracer

Carsmack is great for some things, but falls horribly short in others, like what happened to the car last week, since it's not on the report yet - what happened last week might be kinda important, too, considering the manufacturer may have just bought it back, it may just been totalled, or several other things.

 

That's how the dealer group I formerly worked for pulled off most of their scams - they knew Carfax was 30-60 days behind, they bought wrecks and lemons, gave the customer a clean Carfax report, sold cars quickly, or sent them back to auction, and no one was the wiser...

jlawrence01

Since I do not watch TV, I am not always sure which are "normal" dealers and which dealers market for the less creditworthy.

 

I have bought cars from independent lots that were NOT BHPH. I have bought from dealerships who did a lot of BHPH type activities.

 

Personally, I don't care. I am looking for a good car at a good price. And I am going to go through the car with a fine tooth comb.

 

I have found the priced at JD Byryder to be grossly overprices. However, I could say the same at for Carmax.

Kirstie_H

You notice that no one in the forum has actually bought a car from a BHPH?

 

I did, and I've mentioned it several times. I just didn't use their financing. I was lucky, because I owned a real beater at the time, and they were happy to take it off my hands.

 

However, we need to take this discussion away from talking about what folks should or should not spend on a car, or lifestyle choices. We have a discussion about %age of income spent on a car, and that's sufficient. The rest of it, while interesting, isn't appropriate for these boards.

lemko

...in Philadelphia. The car was a 1988 Oldsmobile Custom Cruiser wagon in excellent condition. I once had a station wagon and loved its utility but I can't stand SUVs. However, I wasn't going to go the BHPH route as I have bulletproof credit. I was going to buy the car outright for cash. This was before I even knew what BHPH was and thought paying for a car by the week was ridiculous. I got a feeling the sales guys didn't want to sell it to me for they could make much more off the traditional BHPH buyer.

nvbanker

As I mentioned before, I've bought lots of cars from these places, but always for cash. One such lot was as you describe, 'not interested' in my business. I asked for a price, the sales guy said, "$265/month". I said, no, how much cash for the car, he said, $265/month. I tried one more time, got the same answer, and I got the message and left. Clearly, they didn't sell for cash, they sell for down payments. Not a bad hustle.

cadillacmike

Hi Kirstie,

 

You're the host, so that doesn't count :-)

 

I'm glad that some others have "come out of the closet" so to speak. I was just wondering, since except for 1 private sale, all of my last 12 car purchases going back nearly 20 years were all from new car dealers. I'm probably doing something wrong here....

rraider

Ok, now for a different side of the equation.

 

My wife was diagnosed with a severe life long illness days after we were married. Both of us were teen agers (17&18). We are in our 30's now.

 

We have had medical bills totalling in the millions of dollars. She had no insurance when we married and can not get it now. Our credit is shot. Are we lowlife, irresponsible people?

 

I usually pay cash for our vehicles but twice I have had to purchase from BHPH dealerships. We paid both cars off and inspite of what we were told neither dealership reported our 100% on time payments to the credit bureaus. This would have helped our credit scores alot. I earn enough money now that we are slowly improving our credit rating but it has been a long difficult road. There are plenty of other people out there like us. We are not bad people, but we have been dealt a hand in life that causes us to be classified as second hand citizens when it comes to credit and anything related like insurance which is now based on your credit rating. Looks like we are classified that way by alot of the posters in this thread as well.

While I would not choose to shop at a BHPH lot if I had a choice twice I would have been on foot with no way to get to work or my wife to the doctor.

Some people may deserve to have to shop at these places but many don't. These places just add another hardship to a life of hardships.

steine13

"These places just add another hardship to a life of hardships."

 

Well, sorta. But if they're the only place that'll sell you a car, then they are better than nothing.

 

And not everybody thinks bhph customers are lowlifes. Some of us keep an open mind... I am willing to cut the customer and the dealer some slack.

 

I just met a guy who does a bunch of bhph; he's always got 20 irons in the fire and -0- attention span; people like that aren't out to screw their customers, but I'd be surprised if he remembered to report on-time payments more than 20% of the time... he also told me about a customer who had two cars out and bounced a $15k check. Yeah, he repo'd the cars...

 

You want to talk about a racket, let's talk about the way health care is dispensed in the US, how the uninsured get to pay higher rates, etc.

 

But maybe this isn't the place, open minds or not...

 

Good luck to you and your wife.

Maybe try to buy a $5k car with $2k down, then pay on $3,000... that way, the interest won't hurt you and you'll improve your credit.

 

-Mathias

danf1

You could petition the credit bureaus to add satisfactory accounts onto your credit report by supplying the information of the loan and a contact person at the dealership for verification purposes.

lemko

...a friend and his wife both make 6-figure incomes and he's always crying broke. Heck, the cost of his kids' daycare alone exceeds the rent on my old apartment. If I made his money, I'd have such an immense reserve of cash that hypothetical liver transplant wouldn't even scare me. However, I doubt very many upper-middle class types are shopping at BHPH lots.

dealerman

I repossess 42% of the cars that I sell off my lot. That makes it sound like my customers can't pay. Nothing could be further from the truth. During the first 6 months, over half of the cars need some kind of repair they can't afford to make. I get to "Pop" the car, make the repair, and sell it again. I love this business! Last year I resold several cars 3 & 4 times. My average profit per car was over $4700.

I have cars for sale that will last, but they all want an SUV. Instead of a reliable low-mileage sedan, they end up with a 12-year-old SUV "repair hog" with 120,000 miles. It's like taking candy from a baby.

qbrozen

i gotta think this is just a troll.
but i guess we'll find out soon enough.

rroyce10

........ **I repossess 42% of the cars that I sell off my lot** ....

Actually thats pretty sad, because thats a pretty poor percentage .. maybe if you spent an extra $420 on each vehicle for the proper service, the right tires and brakes, you wouldn't have that problem ...

$4,700.?!? .. come on, this is a pretty informed readership here and no one fell off the Christmas Tree yesterday ... by the the time you drop the hook, do the extra repairs, pay the mechanic, tie up the extra $$, fix the this and that, or take your beating at the auction, your lucky to make $900, if that ..... guys like you give the industry a bad name ----- especially since your making all this up --

This site is called Edmunds ... not Edumbs.!


sniff sniff, do I smell a troll here..? ......................................... :mad:



Terry

Kirstie_H

That's a shame if it's true. Our hope is that these Forums help provide an opportunity for members to prevent purchasing vehicles like the ones you describe. Many of our members who are sales professionals work hard in here to diminish the negative stereotype that salespeople/dealerships have for being "rip-off" artists, or for taking advantage of consumers. "Taking candy from a baby" is not likely to help that image, so as always... consumers beware!

steine13

OK Folks, I owe you a story.

I think I mentioned -- over on RWTIV -- about an idea I had selling my 99 high-miler Prizm to a guy at work who was having trouble managing money.
To a man (and woman, counting akangl) y'all told me not to do it, it'd be a big mess.

Of course I did it anyway. And the time to fess up is now, when the ball is still in the air, rather than brag about it when it's all paid up, or forget it after I got soaked.

Here's the deal. My buddy "George" has my car, title in his name, paperwork and insurance done properly. He pays me $200/month for 10 months. Nothing down.

EXCEPT: Every payday, he gives me not $200, but $500. $200 for the car, $100 to be put aside for repairs and stuff, and $200 that I kick back towards the end of the month.

We did this the first month, and I couldn't believe it when we drove to the bank together... this dude has money. That is, he has good income and almost no obligations. No alimony, no car payment (not since the last sled got repo'd anyway), no cable bill, no nothing. Well OK, he's got a credit card with a $60 minimum payment, that's it. His rent comes out of his paycheck, and on payday, he's got North of $2000 cash money.

By the 15th, he's usually broke,and that's how come his last car got popped. But unlike most people looking for BHPH, he is not deeply in debt, it just runs through his hands. He's an honest guy with some basic life skills AWOL.

The interesting part will come on the 29th. We get paid, and he's off work from tomorrow until after the weekend. Just think of all the temptations between Fri morning and Sunday night... George promised he'd come in to work on his day off and hand me my $$$. We shall see.

Will George pay? Will Mathias be bilked out of his money? Read the next chapter!

Ta -Mathias

kyfdx

So, let me get this straight...

You sold this guy a car, and now you've become his credit counselor?

He really gave you $300 extra with the first payment?

I think I've heard it all...

regards,
kyfdx

jlawrence01

Have fun. It reminds me of my last adventure.

Bought an old Chevy Corsica off a friend to keep her out of BK. Mistake #1.

Ignored that the car was not maintained as well as it should have been. When I did need #3, it failed on me more than once . Mistake #2.

Sold car to wife's employee for $100/mo, 10 months. Mistake #3.

Got my money back 2 years later. YIKES!!

steine13

"He really gave you $300 extra with the first payment?"

Um, no.
He gave me $500 extra -- $700 cash -- to settle some previous debt.

JL: I hear you, and I'm not sure it's going to work. I gave it some thought and realized that if I simply gave George the car, it wouldn't help for any length of time. But if let him pay it over time and made sure to improve his cash flow, there's a good chance it'll be OK. Realize that if he pays to the end, I'll be owing him $1000.

Of course, the Prizm has to last and mustn't need expensive repairs... but it IS a Prizm, and I've got the full maintenance history from the 1st owner. I just thought it'd make an amusing story for Edmunds.

There'll be an update this weekend, one way or the other :-)

-Mathias

jasmith52

Maybe there's another career for you here.

Buy beater cars to loan out at outrageous rates. When they don't pay either take the car back for your $4700 profit or break their knees.

What a business !

lemko

...from the airport, I passed a new J.D. Byrider franchise in a marginal neighborhood in Philadelphia. I've heard this place is BHPH and has a terrible reputation for ripping people off.

jlawrence01

I give you credit Mathias. You are a good person. I hope George does not abuse your goodwill.

cadillacmike

"I repossess 42% of the cars that I sell off my lot. That makes it sound like my customers can't pay. Nothing could be further from the truth. During the first 6 months, over half of the cars need some kind of repair they can't afford to make. I get to "Pop" the car, make the repair, and sell it again. I love this business! Last year I resold several cars 3 & 4 times. My average profit per car was over $4700.

I have cars for sale that will last, but they all want an SUV. Instead of a reliable low-mileage sedan, they end up with a 12-year-old SUV "repair hog" with 120,000 miles. It's like taking candy from a baby. "

So, over half the cars you sell require some sort of expensive repair within 6 months ?!?!?!?!? That sounds like there might be a failure to disclose hidden but known problems / deftects :mad:

Doesn't this bother anyone else reading this!

guss

Not to stir up trouble, but what will happen if the car should get in an accident and is totaled?

This sounds alot like the deal my Father gave my Brother when he got his first car in High School. That worked out well, but after my brother totaled the car(71 Mustang) my brother never thought about not paying it off first before getting another ride.

rroyce10

....... Remember what happened with Aka .......................... ?

Terry.

steine13

Sure do.
It'll either work or it won't. In one case, I'll be happy, in the other, I will have learned something.

Everybody needs a hobby. It entertains you guys, it isn't immoral, and probably not even fattening.

I'll update monthly, just for the heck of it.

-Mathias

nortexlend

As the owner of a BHPH lot we will pass up any "small" cash deal on our cars. A good quality "note car" that a dealer can own for a good price is just not worth selling on a cash deal for a few hundred profit when I can mark it up several thousand and stand a good chance of selling it more than once.

isellhondas

Even though most of the buyers bring this on themselves, this is a business I know I couldn't do.

No thanks!

steine13

So at 10:30 today, payday, my friend George showed up with cash. On his day off. Two months down, 8 months to go. -Mathias

isellhondas

You are a good person to be doing that. Maybe someday, George will do the same for someone else who needs a hand.

steine13

"[..] George will do the same for someone else who needs a hand."
But he is! He's a member -- actually, the only member -- of the ZORMFFW.

You know, the Zen Ordained Rescue Mission for Fallen Women. He helps out at the local strip club whenever he can. It's true (sniff).

Geez guys, I wouldn't want you to get all teary eyed with brotherly love here... the service I'm performing is to hold back some $$ before they disappear in a G string. At least until the 20th of the month or so.

Everyone does the Lord's work in his own way, right?
One more mention of good works and I'm quitting this thread...

-Mathias

rroyce10

........... **A good quality "note car" that a dealer can own for a good price is just not worth selling on a cash deal for a few hundred profit when I can mark it up several thousand and stand a good chance of selling it more than once** ...

The last time I heard that, was when the bank was locking the doors, the second mortgage was past due and the dealer was 22 seconds way from bankruptcy .........



Terry.

rroyce10

... **He helps out at the local strip club whenever he can** ....

You wouldn't happen to have an address would you.? ..l.o.l.....

Terry.

ghulet

I knew there was something you weren't telling us about this guy, Mathias! Anyone bringing home $4k+ a month clear, consistently ending up broke while renting a cheap apartment and having no bills has a vice of some sort. I just wasn't sure if it was in a bottle, a straw, a pipe, rolling paper (can one smoke THAT much?) or (the light comes on!) the aforementioned g-string. Or (rarely with males, though), shopping (the tragic plastic). Quite often it's a combination of several!

The problem with most poor money managers is that they don't learn. Believe me. It usually takes some major tragedy or the threat of same (repo, eviction, divorce), and quite often even that doesn't help. Then you have things like BHPH, which in theory serve a needy population, but sound like as often as not puts the buyer in worse shape than they were. Some people need to just take the bus if they can't discipline themselves!

Re the comment about 12 year-old clapped out SUVs, very true. I can't tell you how many times I've seen people shell out $5-7k on an eight or ten year-old SUV, only to forget about the $600-800 tires they need, the $50 fill ups, the suspension and drivetrain attention they need, etc. Keeping one on the road involves a lot more than making payments, most people are a lot better off just buying a five year-old car.

beliver

My 80 year old bro-in-law in semi-rural central Ohio has been in the car biz literally all his life. Came out of the service after WWII went into the car game @ his dad's lot in Columbus Ohio. He definately has that eye for cars, x-ray vision for sure in sniffing out a dog set of wheels.

His lot is about 35 miles N E of Columbus, farm country and blue collar commuters to the big city. He is a BHPH but over 50% of his cars are sold for cash. These folks have no credit but do seem to be able to scratch up 3 or 4 grand for the inventory he sells. Of course he does sell the $4000 sleds @ 25%APR as well. He turns ,on average 4 to 5 cars a week, and has virtually no overhead,. Owns the property,has one mechanicac / lot person and handles all the paper work his self. NO computers for him ! Drives a 100 mile round trip twice a week to county seat to do title stuff. Changed banks recently because they would only accept loan apps via FAX, He has no FAX LOL !

He swears he has only had 3 repos in the last 10 years and one of those was his nephew !! Lost a couple to theft. Everybody loves "old Red" and he is working on the third generation of customers, all word of mouth refereals.

He loves the late eighties to early nineties "big iron" Caddies, Lincolns, Olds etc. he does not bat an eye @ these sleds with 100 to 150K on the odo. He has a uncanny ability to scope out real "cherry" high milers. Was here to visit in Florida in Feb. Was driving a Caddy Deville with 188K on it and the thing looke and drove like new.

He has managed to amass a literall fortune in farmland and real estate just off that crummy little "cinder lot". Last year he had a scare healthwise and that made the local paper as "Red the car man seriously ill" he literally got hundreds of get well cards from his customers. So you see all the BHPH are not money grubbing thieves. he has been known to give a car away to a family that was really in a financial jam.

At eighty he has no plans to retire.

Believer

beliver

As luck would have it the Detroit News has a story today (www.detnews.com) in their auto insider site about a dealer in Detroit and Ohio by the name of Mel Farr. You gotta read this ! ! Unreal !

believer

cadillacmike

Can you be more specific as to where in detnews.com th article is? Thanks.

That guy, Red, is the gem in a bed of rocks, nice story. too bad the vast majority od BHPH owners are thieves.