The rise in demand for cars bought-here, paid-here
A combination of high unemployment rates, inflation and an ailing currency has contributed to the flood of bankruptcy and foreclosures in today’s world. The person or family with the ruined credit is behind every financial crisis. Most of the time, these families rely solely on their weekly incomes and/or unemployment checks to help them get by. They still all have to drive – go here!
The BHPH model is geared towards those people in the society that have fallen behind because of a struggling economy. Car sellers who use this model can provide cars for customers with low credit scores and no money, but they will often charge very high interest rates on the vehicles and may take aggressive collection action against owners of these cars who fail to make their weekly car payments. The public is often critical of these business because they prey on people who have little or no money and are in need of transportation.
Some analysts argue that BHPH markets should not be regarded solely as auto markets, but rather financial services. These firms seem preoccupied in collection and payment of loans with high interest, often using vehicles instead of checks postdated. Those of us who can’t afford to pay for our cars lose them. So, it falls on the shoulders of poorer people already struggling with their finances.
Normal car purchasing involves shoppers looking for the car of their choice and then discussing finance options. Before showing the prospective buyers any cars, BHPH agents will discuss their credit history, payments made so far and down payments. BHPH dealers often require BHPH clients to come to the dealership for payment once they’ve chosen their car. Payments made late, even by a day or two, can lead to the car being repossessed.