Buy Here Auto Lots 1.1 (continued)

We are back with our second (segment 1.1) of the analysis on ‘Buy Here Pay Here’ (BHPH) auto lots. Before resuming the topic, we will review some of the service offerings that someone who buys junk cars has. Currently, we buy any car in the Green, Fairlawn, and Cuyahoga Falls area 6 days a week and are here to allow you to sell a car for scrap. Calling a place auto recycler who buys junk cars or a scrap car hauler who buys junk cars is often the lone solution left. To sell a car for scrap in the Springfield Township, Kenmore, or North Akron areas, contact our junk vehicle buyer for a quote based on the value of a junk car. If we were to ask your neighbors, they would say to junk your car for cash today! The value of a junk car has dramatically decreased this past year and the quote for a junk car you receive will reflect it. Our junk car buyers will swiftly provide you a quote for a junk car today.

In the previous BHPH posting we illustrated the basics of the market. We know that BHPH are designed for people with lousy credit to take a loan out directly from the auto dealer, who typically requires them to return to the lot on a weekly basis to make payments. Obviously, the interest rates are much higher, the selection of vehicles from which to choose is much lower and the rates of delinquency and repossession are much higher. Let’s take a look at some plausible scenarios to see how they may turn out.

What happens if the vehicle has a major repair need? (such as a transmission)

According to Constellation Auto: “More and more dealers are offering some kind of warranty with the vehicles they sell and optional service contracts available. Products such as these that are specifically designed for BHPH dealers and the vehicles they sell continue to be more readily available at more reasonable cost. Competition alone continues to expand the number of dealers offering some kind of mechanical protection. If the car stops running, the customer generally stops paying. Most dealers will work with customers in the event of a breakdown to get the vehicle repaired.” The full article is available here.

How do BHPH loans impact your credit rating?

Experian addressed this issue on Experian.com as follows: “Unfortunately, you will probably not be able to have the account reported. The lender (the car dealership) would have to report the loan, meet the legal requirements and fulfill Experian’s subscriber standards in order to do so. The dealership would have to report the account, update the payments regularly and have a system to respond to consumer disputes. It would also need to have the necessary security, computer systems and software to report; it will be cost prohibitive for an organization the size of a small car dealership.” The complete article is available here.

What percentage of BHPH deals end with the loan being paid off?

The precise percentage may be difficult to gauge; therefore, we’ll reference three different resources as follows:

Auto News: “JD Byrider franchisees can expect a loan default rate of about 25%.[1]
Huffington Post: “At DriveTime, at any given moment about 45% of customers were delinquent on payments”[2]
Center for Responsible Lending: “Market data shows that 1 in every 5 BHPH car loans will default.”[3]

[2] http://www.huffingtonpost.com/2014/11/20/drivetime-fine-cfpb_n_6193002.html

[3] http://www.responsiblelending.org/other-consumer-loans/auto-financing/research-analysis/lisa_stifler_testimony_ny_senate_banks_23april2015.pdf

To sell a car for scrap in Summit County

At Cash 4 Cars Akron we buy any car in Sharon Center, Mogadore or Stow, in any condition. Our eco-friendly recycling processes are among the best of who buys junk cars since we generate less pollution. Old cars contain harmful chemicals that we process when you sell a car for scrap in an environmentally sound way to avoid any contamination. To junk your car for cash in Monroe Falls, East Akron, or Silver Lake, contact our scrap vehicle buyer at (330) 271-6464. We buy any car even if damaged or wrecked throughout the regions of Wadsworth, Kent, and New Franklin. Residents of Firestone Park, Highland Square, and Copley are in luck, as we now junk your car for cash with free towing in the area. Our ‘scrap my car’ service area now encompasses the areas of Barberton, Ravenna, and the Merriman Valley. Those residing in Brimfield, Tallmadge, and Peninsula should know that our auto recycling helps to reduce energy usage and lessens consumption of many raw materials.