Buy-here, pay-here lots, traditionally the place to find a vehicle with little, bad or no credit, are facing some stiff competition as of late from new-car dealers offering cheap financing.
Automotive News reports in a conference call this spring by America’s Car-Mart CEO Hank Henderson, he said new-car dealerships were making finance offers on both low-end new vehicles and high-end used units his group are unable to counter:
Some of the offerings are zero percent down, no payments for 90 days. We’ve even seen no payments for a year — and then those are getting financed at 72 months, sometimes even longer.
Lenders are fueling the demand for cheap credit at new-car dealers, as well, forcing the buy-here, pay-here dealers to turn down business from consumers hoping to find as much with the latter party. That said, the approach said dealers promote — including substantial down payments and shorter terms — claims to be more economically healthy for subprime consumers than the competitive approach that could leave a consumer upside-down in the long run.