Sign, drive, default, repossess and resell — that's the game at Buy Here Pay Here dealerships

[Newsjock]

http://www.latimes.com/business/buy-here-pay-here/la-fi-buy-here-pay-here-part1-storyb,0,4616431,full.story

... In this little-known but fast-growing corner of the auto market, dealers command premium prices for road-worn vehicles and finance the sales at interest rates that can top 30%.

In a kind of financial alchemy, they have found a way to turn clunkers into cash cows and make money off the least creditworthy customers: the millions of Americans who are stuck in low-paying jobs, saddled with debt and unable to qualify for conventional auto loans.

For most of those people, having a car is the only way to stay employed, and they'll accept almost any terms to get one.

... About 1 in 4 buyers default. In the real estate and credit card industries, that would be bad news. In the world of Buy Here Pay Here, it's just another avenue for profit: The car can be repossessed and put back on the lot for sale in short order. A new buyer makes a down payment, takes on a high-interest loan and the cycle starts anew.

[MadHound]

1. Then don't buy from one of these vultures, it's that simple. n/t

[madrchsod]

2. no...it`s not that simple.

try buying a car with a bad credit score...

[doc03]

3. +1 These dealers are not into selling cars they are

selling high interest loans.

[Atman]

5. And the cars are almost always pieces of shit that will need constant repairs.

This further exacerbates the problem for the person who likely can't even afford the payments in the first place. Shame on the poster who says "it's just that simple." It's only "that simple" if you have credit and other options. He clearly lacks understanding and compassion.

[doc03]

6. A couple years ago I saw a car I liked at one of the

national chains in that racket. They were asking way over Blue Book for it and I was able to pay cash and they wouldn't come down a cent. All they kept coming back to how much monthly payments I could make, they didn't even seem interested in cash. You tell them what you can afford they adjust the length of the loan to the payments. You miss a payment they take the car back and sell it again.
Like land contracts same thing, I hear they get 2/3 of the property back.

[Cirque du So-What]

7. Shame indeed!

Dog, I hate simplistic suggestions - and don't get me started on that supercilious tone!

[dixiegrrrrl]

4. Which explains why 2 guys came down our driveway last week

in a car, they explained that one of them needed a car to get to work and did we want to sell either of our 2 old cars ( which were parked in view from the road).
We both have 1993 cars.
The guy looking offered to pay Mr. Dixie 500.00 down and the rest on time.

Problem was, we did not know these guys from Adam.
And we cannot afford to buy newer cars.
and we would never extended credit who was not close as family.

It seemed real strange that perfect strangers would drive all the way down our driveway ( we are set way back from the road, but Mr. D's Explorer is visible from the road).

It may be that buying a used car IS that difficult now....interesting.

[coalition_unwilling]

8. That is some vignette you paint. Might almost be worth its own OP.

A sign of desperate times perhaps, or of modern-day grifters. But gripping nonetheless. Thanks for posting.

[dixiegrrrrl]

9. Great minds. We thought grifters immediately, or someone scoping out the house.

Since we ARE set way back from a neighborhood street that has very little out of the way traffic.

And for the next week Mr. D. parked his Explorer next to the house, not halfway up the driveway.
Fortunately, we have a large ferocious barking dog, which was very noticeable to the guys.
One of us is always at home, also.
But, now that it seems used cars are so hard to buy, and we ARE in an area that has been hit very hard by the Depression, maybe that is all there was to it.