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Smart Shopper Buy Here, Pay Here
328 messages, Last post on Jul 19, 2009 at 7:42 PM
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Mrs. Turboshadow and I disagree completely on the subject of BHPH, furniture rental, payday loans, title loans, and other places that the local news media have dubbed "predatory lenders." My take on the deal is that the people that use these places actually have no recourse because of bad credit, or are young and have yet to establish credit. Sure, it seems unfair, but there is an aweful high number of people who default on them as well. As one ex-car dealer told me, "Bad credit is expensive." I am leery of buying cars from these places, though. Even though I obtained finacing thru my credit union, I didn't look at any cars from the BHPH lots; I was afraid of the aforementioned lemons, salvages, and flood cars. Turboshadow |
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"BHPH, furniture rental, payday loans, title loans, and other places that the local news media have dubbed "predatory lenders" BHPH and furniture rental, though, however overpriced and repo-threatening, actually provide a service where consumers buy a product that they can pay off and keep. When I was a young buck, just returning from doing my first 5 years in the AF overseas, at 23 I had no credit. We bought furniture and a washer and dryer through Rent-A-Center or someplace like it in Abilene, TX, paid it off and kept it until 1994. Kept the washer/dryer until 1999. Now, the payday loans? OMG....these folks take people who already can't handle their money, loan them more money, and charge them up to 100% interest...in many cases, you agree to allow them to GARNISH your wages...even BHPH or furniture rental places can't do that. The title loan thing? That one's entertaining - you let them hold the title to your $3,000 car while they loan you $500 at sky-high interest. You don't pay back the bucks, they take your car - in many cases, they keep your car in a lot until it's paid off - no risk for the lender, for sure... "Bad credit is expensive." Very true - and it's no one's fault but the person with the credit history, save a few circumstances with medical bills or natural disasters. Given NORMAL bad credit though, I don't feel sorry for anyone - you put your name on a piece of paper syaing you'd pay some money by a given date - you didn't do that - your credit now sucks. Tough cookies. It's called personal responsibility, I have no sympathy, and you'd better bet that there'll be a "Big Jim's Buy Here Pay Here, We Finance Luxury Automotobiles and SUVs, pickup trucks and family cars" coming soon to a corner lot near you... |
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there is a small, family owned lot in my area that has been there a long time (I used to live around the corner). Dad buys the cars, mom runs the lot type of place. Anyway, very respectable, good reputation. All nice cars, generally 5-8 years old IIRC (lots of '98 Camrys, Grand Ams, Buick, that type of thing). All clean, normal mileage cars, most of which come from local new car dealers. They all get a good going over by the mechanic. Anyway, basic transportation, and if I needed this type of car wouldn't hesitate to go there. point of the story is that they offer some (or most) as either straight purchases, or BHPH ($500 - $1500 down usually, then $50/week). They quote both ways, and the prices from what I can tell seem to be decent. But, I don't get any sense that they are into any "predatory" lending practices. Rather, it is a way for them to move cars to their target audience. Plus, by getting a decent % down, they have some of their exposure covered, but you don't see the same cars constantly being recycled on the lot. IMO, BHPH is capitalism at it's best. A need exists, it gets filled. |
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If these guys can scrape up $500-$1500 for a downpayment, why can't they buy a car the old-fashioned way? Most guys I know that would have to buy a car on a payday payment plan, don't have enough money to buy lunch on the day before payday... |
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Hot deals on Lincoln Blackwood's, Pontiac Azteks, and Chevy SSRs!!! See the man under the big tent!!!! See my exclamtion marks!!!!! The ex-car dealer that gave me the "Bad credit is expensive" quote said his gravel BHPH lot was super lucrative. Oddly enough, I met him while I was teaching in prison (long, strange tale). Crimes unrelated to profession. Turboshadow
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what you have in the car, unless you're dealing with a repeat customer with a good track record. The cycling of cars is where the money is made. Let's say you buy a fair shape 120,000 mile 8 year old Grand Am. You pay $1200 for it, and put on brakes and tires, and you have $1600 in it. You accept a $1500 down payment on it, and $50 a week. After a month of payments, the new owner comes up short and you pop the car. You now own it for free, having collected $1700 on it. If they want it back, they can pay a $250 (pre-agreed) reposession fee, plus any payments in arrears. They take it back, and you're now at least $250 in the black on this car. It repos again a month later, and the car is now $350 in the black, even though it's reposessed and it's back on your lot. You sell it again, taking $1,000 down. You're now showing a $1,350 profit on it, and in addition to that money, everything else is gravy. This one pays it all the way out over 18 months. That's $3,600 in payments, plus the down payment. The car has netted you $4,850 in 18 months. Now - multiply that number by 100-200, depending on how many cars you have burning gas and bringing in cash during any one given week, and you can see the profit potential. Even if you only average $3,000 income on each unit, selling 25 cars a week and having 200 accounts at any one time...the numbers are staggering. I'm on pain meds, so I'm not EVEN going to try to do the math. Where's my engineer student son and his fancy dandy calculator when I need him?
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Replying to: turboshadow (Jan 04, 2005 7:35 am) The BEST buy here pay here cars are Tauruses, Sables, Crown Vics, Buick LeSabres, and Chevy Luminas/Impalas/Malibus. Oh, and Neons, Focuses, Escorts. Miled up Explorers, especially XLTs, Eddie Bauers, and Limiteds command crazy money, with folks willing to get payday loans and title loans in order to come up with the $3,000 down payment needed to roll one of these status symbols. |
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Replying to: driftracer (Jan 04, 2005 7:36 am) Turboshadow |
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rest is gravy. Big Jim wants a boat, a couple of jet skis, two motorcycles...and a big house - I want to thank, in advance, all those folks who didn't pay their bills and can't get bought through GMAC, for doing business with me. |
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| Those numbers got my adrenaline going. | |
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