Shopping for a new car or truck in Big Sky Country? Have bad credit? The MT Buy Here Pay Here car lots in our Buy Here ‘N Pay Here network regularly approve customers with no credit, bad credit, bankruptcy or repossession. Unlike many dealers, Buy Here Pay Here dealerships offer financing in-house. That means they lend out of their own pockets instead of taking a commission from an outside lender. For car buyers that means more flexibility when it comes to credit problems.
BHPH Financing Tips
Pre-owned vehicles are at the core of most BHPH car lots in Montana. This is usually the smartest option if your credit history is marred by bankruptcy, repossession, or poor credit in general. New cars and trucks depreciate at staggering rates, often dropping to 75-80% of their original value as soon as the tires hit the street. That’s because you pay retail, but as soon as the car is sold, dealers will only pay wholesale to get it back. That means a steep drop in value.
A vehicle for which you agreed to pay $20,000 over a 48, 60, or 72-month period may be worth only $15,000 before the first day of ownership is over. If you want to sell the vehicle, you’ll have a significant sum of debt to repay that the auto sale won’t cover, the car not being worth the amount of the loan.
Instead, we encourage you to buy a pre-owned vehicle and offer a down payment or trade-in if you have the resources. This will militate against negative equity, lower your payments, increases the odds of credit approval, and make your vehicle cost less in the long run.
With credit problems a good-credit cosigner is also recommended (but not required). A cosigner can allow you to qualify for improved auto loan rates, as well as improving your chances of approval.
Budgeting for your New Car
Most financial experts recommend dedicating 18-19% of your monthly budget to vehicle payments and costs.
Monthly car payment is not the only factor. Fuel, car insurance coverage, maintenance, tag and title fees, and other expenses like public transportation or secondary vehicles all factor into this equation. So if you take home $3500 per month, that’s $700 to spend.
Knowing Your Credit Score
Auto finance experts recommend that you should always check your credit report before signing your financing deal.
That’s because your auto APR rate is based largely on credit score. Without knowing your score you could pay too much for your new vehicle.
You should ensure that your report doesn’t have issues like false or misreported bankruptcy, foreclosure, auto loan delinquency, auto repossession, and/or similar credit-damaging events that could end up inflating your financing rates to astronomical proportions.
When you apply for financing via our website, we’ll shoot a brief message to your inbox which informs you of how to check your credit report and find out what range of car loan interest rates you should expect.