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Using a Buy here pay here car purchase to rebuild credit..


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As you may already know, I filed for BK CH 7 in 2002 and "screwed up" on most of my post BK CCs.

I got some of the screwups removed and my BK removed from EQ and TU, but not with EX yet. I was also unable to get my vehicle repo in 2004 removed as of yet.

I was thinking of going to a buy here pay here lot and buying a car in the price range of 2k-5k dollars. I would put down most of the money to keep the burden of high interest rate payments off of me.

I would still like to make a few payments to get get a positive tradeline on my CR.

Any suggestions on how I could split the payments up to raise my score?

Do I have to ensure that I am making payments for a certain amount of time before my score goes up, or could I just finance out a few months??

Do I have to ensure that the car lots finance company will actually report me to a CRA?

Thanks for your suggestions.

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As you may already know, I filed for BK CH 7 in 2002 and "screwed up" on most of my post BK CCs.

I got some of the screwups removed and my BK removed from EQ and TU, but not with EX yet. I was also unable to get my vehicle repo in 2004 removed as of yet.

I was thinking of going to a buy here pay here lot and buying a car in the price range of 2k-5k dollars. I would put down most of the money to keep the burden of high interest rate payments off of me.

Good Idea

I would still like to make a few payments to get get a positive tradeline on my CR.

Any suggestions on how I could split the payments up to raise my score?

Figure out how much you can afford to put down, and the difference between that the price then spread over 12 months. That should give you a sufficient positive TL to build upon

Do I have to ensure that I am making payments for a certain amount of time before my score goes up, or could I just finance out a few months??

Do I have to ensure that the car lots finance company will actually report me to a CRA?

Thanks for your suggestions.

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I was going to ask you Mr. Grim Repo :-) but didn't want to specifically annoy you...

Could I not push the tradeline out over 6 months? Or is a year the minimum?

Thanks again...

6 months isn't much to gauge a customer by in the overall scheme of things, considering the average credit history is over 10 years

Yes the interest is going to suck but look at it as paying for a new TL.

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  • 2 weeks later...

whatever you do, do not go to a buy here pay here lot unless you are planning on waiting ten years to buy a new car! What many people don't understnad is that once they go to one of these places, they will be stuck a sub prime interest on their next purchase no matter how good they improve their score!

An example... My cousin bought her first car from one of those lots. She payed on it for 48 months with not one single late payment. Then she went to buy a new car and ended up getting a 16.7 % interest rate. Her credit is actually 150 points higher than when she bought the first car. Of course, if she pays on this note for 3 years with no late payments, she can buy a new car and will probably get down into the 8% range, but that's three years from now.

Now, twelve months may give you a slight boost on your score, but the mere fact that it is a buy here pay here note will cost you alot of money on your next purchase. If this is acceptable, then go for it, but I would say that you are better off with a secured credit card or small bank loan.

Remember, not all positive TLs are created equal.

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As you may already know, I filed for BK CH 7 in 2002 and "screwed up" on most of my post BK CCs.

I got some of the screwups removed and my BK removed from EQ and TU, but not with EX yet. I was also unable to get my vehicle repo in 2004 removed as of yet.

I was thinking of going to a buy here pay here lot and buying a car in the price range of 2k-5k dollars. I would put down most of the money to keep the burden of high interest rate payments off of me.

Most buy-here pay-here places only report the bad credit customers, not the good ones. This strategy may not work very well. Also, they tend to sell cars for twice what they are worth, so even with a 50% down payment you are still upside down. With a big percentage down payment you may be better off buying a cheapo new car ($5K is 1/3 the price of the cheap chevys, kias and other brands - NEW). You may pay a higher interest rate than the prime customer but you will get a better car.

I would still like to make a few payments to get get a positive tradeline on my CR.

Any suggestions on how I could split the payments up to raise my score?

Do I have to ensure that I am making payments for a certain amount of time before my score goes up, or could I just finance out a few months??

Do I have to ensure that the car lots finance company will actually report me to a CRA?

Thanks for your suggestions.

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whatever you do, do not go to a buy here pay here lot unless you are planning on waiting ten years to buy a new car! What many people don't understnad is that once they go to one of these places, they will be stuck a sub prime interest on their next purchase no matter how good they improve their score!

An example... My cousin bought her first car from one of those lots. She payed on it for 48 months with not one single late payment. Then she went to buy a new car and ended up getting a 16.7 % interest rate. Her credit is actually 150 points higher than when she bought the first car. Of course, if she pays on this note for 3 years with no late payments, she can buy a new car and will probably get down into the 8% range, but that's three years from now.

Now, twelve months may give you a slight boost on your score, but the mere fact that it is a buy here pay here note will cost you alot of money on your next purchase. If this is acceptable, then go for it, but I would say that you are better off with a secured credit card or small bank loan.

Remember, not all positive TLs are created equal.

I don't agree. I purchased at a buy here payer here place. Put $2K down on a $6K car. Financed the balance at 21.05% for 18 months. I paid the balance in 12 months. They reported 13 months to every CRA. Next car I bought was pre-approved for 14%, and a local CU got me to 9.9%. I only had that car from Feb '05 to Nov '05 and now I'm at 5.25%. So, not all buy here, pay here places are evil. It was a very positive experience for me.

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You know, as an owner of a buy here pay here lot, its frustrating to see how people question the integrity that we may have....although after hearing stories of what some of my customers have gone through, it is understanding why they become bitter towards the typical car salesman. Be sure to ask your buy here pay here lot if they report to the CRA, not all do. And even then, i would check your Credit Report once every three or four months after purchase to see if that dealer does or does not. Also, if purchasing a vehicle just to rebuild credit is what is on your agenda. You may consider the secured credit card as said earlier. Most customers need to understand, that unless they have a mechanic to take their vehicle to before the purchase for a "once-over", which I highly recommend, they are still buying a four thousand or five thousand dollar car which may have mechanical limitations. A far cry from what you see on the new car floor. Just a few tips, wish you luck.

concerned car dealer

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really don't think the mechanical condition of the car, or whether or not the dealership reports to the CRA's is the real issue with buy-here-pay-here... at least that's not what the FTC and state Attorneys General are smacking these places with...

A good read: "Confessions of a Car Salesman"

http://www.edmunds.com/advice/buying/articles/42962/article.html

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You know, as an owner of a buy here pay here lot, its frustrating to see how people question the integrity that we may have....although after hearing stories of what some of my customers have gone through, it is understanding why they become bitter towards the typical car salesman.

You wanna see why? Look at this thread, the dealer here was a buy here- pay here:

http://debt-consolidation-credit-repair-service.com/phpBB2/viewtopic.php?t=39913

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whatever you do, do not go to a buy here pay here lot unless you are planning on waiting ten years to buy a new car! What many people don't understnad is that once they go to one of these places, they will be stuck a sub prime interest on their next purchase no matter how good they improve their score!

An example... My cousin bought her first car from one of those lots. She payed on it for 48 months with not one single late payment. Then she went to buy a new car and ended up getting a 16.7 % interest rate. Her credit is actually 150 points higher than when she bought the first car. Of course, if she pays on this note for 3 years with no late payments, she can buy a new car and will probably get down into the 8% range, but that's three years from now.

Now, twelve months may give you a slight boost on your score, but the mere fact that it is a buy here pay here note will cost you alot of money on your next purchase. If this is acceptable, then go for it, but I would say that you are better off with a secured credit card or small bank loan.

Remember, not all positive TLs are created equal.

I don't agree. I purchased at a buy here payer here place. Put $2K down on a $6K car. Financed the balance at 21.05% for 18 months. I paid the balance in 12 months. They reported 13 months to every CRA. Next car I bought was pre-approved for 14%, and a local CU got me to 9.9%. I only had that car from Feb '05 to Nov '05 and now I'm at 5.25%. So, not all buy here, pay here places are evil. It was a very positive experience for me.

What is the name of that car company that reports to all 3 CRA's?

We need to compile a list of car lots and who they report too... That would be some useful info for a lot of people.

Brad

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I am not saying that buy here pay here lots are evil, I am just saying that a prime lender will see that your last purchase was with one of these lots, and your future interest rates will be affected by that. The general step is buy here pay here, then subprime lender or even prime lender with high interest rate, then low interest rate. If you are in need of a car, and your credit is shot, then this is a very good option for you. But, if you are doing it simply to boost your credit score, you need to realize that even with a slight boost in score, you still won't likely get the best rate on your next purchase.

After all, going from 21 percent to 14 percent really isn't a bargain. If you go with a new car at 21 percent, then another car at 3 or 4 percent, you are better off in the long run.

And remember, a 12 month TL is not going to boost your score too much no matter what you do.

Just my two cents again.

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