If you’re currently shopping for a new or used car despite your poor credit score, you may be a bit wary of Buy Here-Pay Here dealerships. Generally, these businesses have a negative stigma, as many consumers assume that their vehicles are lackluster and the accompanying interest rates are too high to overcome.
These concerns have only been emphasized recently, as a number of dealerships have been sued for unethical practices. While those concerns are certainly warranted, prospective buyers shouldn’t be overly concerned. After all, these specific Buy Here-Pay Here dealerships are generally the exception to the rule.
Below, we’ve explored some of these specific cases, and we’ve explained why customers shouldn’t be worried. Then, when you’re hunting for a Buy Here Pay Here dealership, you won’t have any reservations…
Manipulation
Earlier this year, Chicago resident June Shivers claimed that a Buy Here-Pay Here dealership forced her to purchase a replacement vehicle. While she initially wanted her 2005 Lincoln LS to simply be serviced, the sales team coerced her into purchasing a 2014 Ford Fusion and honoring monthly payments that were approaching $400. While the dealership (which also provided Shivers with financing) played it off as a standard trade-in, the driver claimed that she had no intention of selling her Lincoln.
“Shivers alleges in a lawsuit filed last month in Cook County Circuit Court that, as an elderly woman with memory problems, she was duped into swapping her beloved Lincoln,” wrote Beck Yerak of the Chicago Tribune. “She’s suing Napleton Lincoln and Citizens Bank, which provided financing.”
As the writer goes on to explain, this manipulation emphasizes how tough it can be to regulate the entire industry. Yerak cites a Federal Deposit Insurance Corporation study that found the “elder fraud” is among one of the most popular scams among banks and dealerships. These businesses tend to exploit these older customers by manipulating them and convincing them that they should go forward with a car purchase… even if it doesn’t make a whole lot of sense financially.
However, as a prospective car buyer, you shouldn’t be worried. After all, while Buy Here-Pay Here dealerships previously were accompanied by a bad mantra, most of these businesses are plenty reputable and trustworthy. Ultimately, it’s up to the customer to be alert during their car-buying experience. Read online reviews to understand other customers experiences, and be on the lookout for any manipulation from the sales team. If you’re worried about any elderly friends or family members getting taken advantage of, make sure you make it abundantly clear to them that you’re willing to accompany them on any trip to a dealership.
Inadequate Cars
Once upon a time, Buy Here-Pay Here dealerships were known for their lackluster selection of vehicles. Occasionally, buyers would even report claims regarding lemons, cars that are unable to operate. Well, used car dealership JD Byrider is not doing much to help eliminate that preconceived notion. Massachusetts Attorney General Maura Healey recently sued the business, claiming they “sold poorly reconditioned cars and saddled consumers with unaffordable loans and unhelpful extended warranty packages.”
Ultimately, the lawsuit claims that the dealership more than doubled the retail prices of their available vehicles, and they offered accompanying interest rates that were approaching 20 percent. The business was clearly taking advantage of these consumers. Prospective buyers with poor credit will find that it’s particularly difficult to pursue financing from a financial institution or dealership. Since JD Byrider was providing a unique opportunity to these individuals, they presumably figured they could take advantage of their limited options.
“We allege that JD Byrider ripped off Massachusetts drivers by offering predatory loans for defective and inoperable cars,” said Healey (via Jim Kinney of MassLive.com). “Our goal in this lawsuit is to recover losses to Massachusetts consumers and make this company pay for the harm they caused to thousands of drivers across this state.”
While the lawsuit is certainly troublesome, consumers shouldn’t be overly worried. As we previously mentioned, many Buy Here-Pay Here dealerships are plenty reputable, and their cars should be in fine condition. Furthermore, before you commit to a purchase, you should have the vehicle inspected by a trusted, unbiased mechanic. In the event that you are offered incredibly high-interest rates, you should consider shopping around for a better financial deal elsewhere.
Harassment
We all know that dealerships and salesmen can be rather pushy, but the Phoenix-based DriveTime Automotive Group took that to a whole new level. The company, which is the country’s largest Buy Here-Pay Here business, was recently sued for eight million dollars by the Consumer Financial Protection Bureau. The CFPB claimed that the company harassed customers who failed to make their payments in a timely manner. Specifically, they called these individuals at work, including one case where they called a workplace more than 30 times. While the dealership seemingly has the leverage in this situation, they’re certainly not allowed to harass their customers. In fact, the business hired more than 290 collectors to deal with these late payments.
“Consumers who purchase a car at a buy-here, pay-here dealer deserve to be treated fairly,” said CFPB Director Richard Cordray told Hunter Stuart of the Huffington Post. “DriveTime harassed and harmed countless consumers, many of whom were economically vulnerable.”
“DriveTime strives to comply with all applicable laws and provide exemplary service to our customers,” said company general counsel and Executive Vice President Jon Ehlinger. “DriveTime had taken and has continued to take steps to enhance its customer experience, and loan servicing activities, including the handling of, do not call requests.”
You’ll presumably get a good idea of the dealership when you first walk into the business. If the sales team or any other employer is overly pushy, you may want to be wary. Even if you’re planning on completing your applicable payments in a timely manner, the dealership may still find other ways to harass. Once again, as a prospective buyer, it’s in your best interest to explore the experiences of previous customers before you opt for a particular dealership.
