At Ride Time, we specialize in providing great cars to Canadians with good or even bad credit. With our unique network of lenders, we can guarantee that you get a fair rate on a fantastic used car – and that you get the transportation you need to keep living a convenient lifestyle.
That’s why we’re so opposed to “Buy Here, Pay Here” dealerships. These dealerships are what give legitimate used car dealerships, a bad name, by taking advantage of Canadians with less than ideal credit, who can’t get a traditional auto loan.
Instead of using third-party lenders, these dealerships finance cars themselves. This means that buyers at “Buy Here, Pay Here” dealerships are often locked into poor interest rates, and have to pay exorbitant fees to continue making loan payments.
So to help spread the word about these predatory dealerships, we’ve put together a list of the top 5 reasons you should NEVER choose a “Buy Here, Pay Here” dealer – and should turn to a legitimate, consumer-friendly used car dealer like Ride Time!
1. Low Quality Cars
The first issue that “Buy Here, Pay Here” dealerships often have is poor-quality cars. Cars sold at these dealerships have often been sold multiple times to different owners – and then repossessed as soon as the buyer misses a single payment.
The cars on offer at BHPH dealerships usually are sub-standard, and very rarely have any documentation about maintenance history, previous accidents, or other details that can help you determine how well a car has been taken care of.
For this reason alone, BHPH lots should be avoided – you’re much more likely to invest in a poor-quality car that ends up dying, and you’ll still have to pay your car payment, even if your car ends up kicking the bucket.
2. Sky-High, Variable APRs
If you have great credit, auto loans from banks and financial institutions will usually have a fixed APR of 5-10%, which is fairly reasonable. And even if you have bad credit (600 credit score or less) you usually will pay a maximum of a 20% APR.
At BHPH dealerships, typical rates start at 18-20% APRs – and can easily be as high as 30%. That means each month, you’ll be paying them a huge amount of money that goes directly into their pockets.
Even worse, many of these dealerships use variable APRs. They can jack up the APR of your car payment – and unless you can continue to pay it each month, they’ll repossess your car.
3. Dealers Profit Directly From Higher Car Prices
At dealerships like Ride Time, there is no advantage to charge sky-high prices for cars. Because we use third-party lenders, we don’t profit from more expensive loans, or higher monthly payments.
The opposite is true at “Buy Here, Pay Here” dealers. Because they offer risky loans, these dealerships finance cars themselves – you’ll deal directly with the dealership when paying your auto loan.
This means that if they charge higher APRs and prices, the extra profit goes directly into their pockets – so they’re incentivized to get as much money out of you as possible, especially if you have bad credit and don’t think you have any other options.
4. “Lockdown” Devices Shut Down Your Car In Case Of Nonpayment
Because of the high APRs and variable interest rates often used in BHPH dealerships, the rate of repossession is very high – often as high as 25%. Because of this, many of these dealerships have begun installing “lockdown” devices and GPS trackers in their used cars.
These lockdown devices can render your car unusable until you pay your monthly bill – and the GPS trackers make it easier for them to track you down and repossess your vehicle, even if you only miss one monthly payment. These devices are only removed when you pay off the car – which can often take up to 5 years.
5. Failing To Make Payments Can Further Damage Your Credit
The hugely variable car payments offered by BHPH dealerships can seriously damage your credit. If your interest rate changes and your car payment spikes, you may not be able to pay it – and this information will be recorded on your credit score, and further damage your credit report.
So while some people see dealer-financed used cars as a method by which they can repair their credit score, the opposite is often true – highly variable monthly payments make it difficult to pay on time, and can further damage your credit.
Don’t Deal With Scammy Dealers – Come To Ride Time Now!
At Ride Time, we believe in a better way of doing business, and we specialize in second chances. You shouldn’t have to deal with scammy dealers or sky-high interest rates just because you have bad credit.
That’s why we have partnered with over 15 specialized lenders in Canada to provide reasonable loans on our fantastic used cars.
If you can provide us with a valid Canadian driver’s licence, proof of employment for 3 months or more, and a pay stub showing $1,500 a month in take-home pay before deductions, we pledge to work with you to find the perfect used car for your needs.
So browse our selection of used cars, trucks, and SUVs online, or come into our Winnipeg location today. We’d love to discuss your needs, and help you get your life back on track with a fantastic used car at a reasonable rate.