Buy Here Pay Here Definition Info

: Approval is often based on proof of residence and income (e.g., pay stubs) rather than a FICO credit score.

: They assign (sell) less than 90% of their contracts to third-party lenders within 45 days, effectively keeping the vast majority of loans "on their books". Core Business Model Characteristics

: To offset the risk of lending to high-risk borrowers, interest rates are significantly higher, sometimes exceeding 30%. buy here pay here definition

: As of recent market research, there are roughly 33,000 such lots in the U.S., compared to 22,000 new car dealerships.

Legal definitions, such as those used by the California DMV , often characterize a BHPH dealer by two primary criteria: : Approval is often based on proof of

A dealership is a type of used-car seller that acts as both the retailer and the lender, providing in-house financing directly to consumers . Unlike traditional dealerships that send loan applications to third-party banks or credit unions, a BHPH dealer uses its own money to underwrite the loan, meaning the buyer makes payments directly to the car lot. Technical and Legal Definition

Academic and economic reviews, such as those featured on Investopedia and Governing , identify several defining traits of this model: : As of recent market research, there are

: Many lots use GPS tracking or "starter interrupt" devices to facilitate easy repossession if a payment is missed. Market Scale and Impact