What is an In-House Financing Dealership?

Car dealerships that offer in-house financing can help people with low credit get an auto loan. Learn the pros and cons of in-house financing before you sign.
Written by Amber Reed
Reviewed by Jessica Barrett
In-house financing dealerships offer buyers the option of securing a car loan directly from the dealership. This means that instead of making your loan and interest payments to a bank, you pay the dealership directly.
Often called “buy-here, pay-here” dealerships, an in-house financing dealer may be right for you if you don't have a good credit score or you think securing a loan from a bank or credit union may be difficult. It’s often easier and faster than a typical
car loan
, but comes with downsides, such as high interest rates.
, the
trustworthy insurance comparison app
, known to save driver money on
car insurance
, has put together this guide to help you navigate the world of in-house financing. Let's get started!
Compare auto insurance policies
No spam or unwanted phone calls · No long forms
Find insurance savings

The pros of in-house financing

If you need a car loan but have less-than-stellar credit, you may not be able to get approved for a traditional car loan through a bank or credit union. In-house financing dealerships can get you on the road while you work to improve your credit.

Loan approval based on stability, not credit

When dealerships finance loans, they don’t have to stick to the same credit score and down payment requirements typical of traditional auto loans. Your dealership may ask to see your paystubs to prove you have enough income to afford your payments, but a low credit score shouldn’t hold you back.

Longer loan terms than a traditional lender

In-house financing car dealerships often give you the option of a longer loan term than you would get from a traditional lender. A longer loan term reduces your monthly payments, making them easier to afford.
MORE: How to get a cosigner for a bad credit car loan

The cons of in-house financing

While an in-house financing dealership is sure to get you on the road, there are some pitfalls to “buy-here, pay-here” loans that you should consider before you sign.

High interest rates

In-house financing dealers will often charge high interest rates on their loans to offset the risk that comes with lending to credit-challenged customers. They may even use pre-computed interest loans, which means you can’t reduce the interest you pay on your loan, even if you make payments early.

Going to the dealer to pay is inconvenient

Many “buy-here, pay-here” dealers require you to come into the dealership to make your payments in person, which can be a hassle, especially if you don’t live near the dealership. Some will even require bi-weekly or weekly payments, whereas typical loan payments are made monthly.

Usually only available on high-mileage, older vehicles

In-house financing is often limited to older vehicles with high mileage, so you might end up having to spend a lot of money on repairs. You’ll also have to choose from whatever vehicles the dealer happens to have available on the lot at that point in time, making it difficult to comparison shop for better deals.
Key Takeaway In-house financing may be quick and easy, but your loan will come with a high interest rate.

Will in-house financing affect your credit score?

Whether or not in-house financing car dealerships report your loan to the consumer credit bureaus is completely up to them. If you want to use your loan to increase your credit score, make sure to ask your dealer about their policy before you sign.

Choosing an in-house financing dealership

Deciding how to finance your next car can be tough, but finding a “buy-here, pay-here” car dealer is easy. Many used car lots offer in-house financing, and some even specialize in it.

How to find a dealer that offers in-house financing

If you’re looking for in-house financing, try a quick google search for “buy-here, pay-here” dealerships or “tote the note” car lots. If you’re visiting dealerships in person, look for signs that say things like “No credit check required” or “No credit, no problem.”

How to pick the right in-house financing dealer

Dealerships are often quick to offer guaranteed financing since it’s an easy way for them to make money, but you should still be particular when choosing your in-house financing dealer. Some signs of a good in-house financing dealer are: 
  • They will offer a selection of vehicles to choose from. Stay away from dealers that push you towards a single vehicle on their lot—usually a clunker with very high mileage.
  • They offer a warranty no matter which car you pick. Buying a car with no warranty means you’re responsible for any repairs, even if it breaks down right after you drive off the lot!
Key Takeaway Most used car lots will offer in-house financing. Be discerning when choosing your dealer.

The bottom line—should I consider an in-house financing dealership?

It may seem like in-house financing is your only choice if you have a low credit score, but it’s important to consider your other options before signing a high-interest loan with a dealer. Finding a co-signer for your loan or waiting until you increase your credit score can help you secure a traditional auto loan from a bank or credit union. In-house financing may be the easiest way to secure an auto loan, but because of its many downsides, it should only be considered as a last resort.

Save money on your car insurance and your car loan

Want to save money while you pay off your car loan? The
app is a great place to start. A licensed broker, Jerry does all the hard work of finding cheap quotes from the top name-brand insurance companies and buying new car insurance. Jerry will even help you cancel your old policy.
And to ensure you always have the lowest rate, Jerry will send you new quotes every time your policy comes up for renewal, so you’re always getting the coverage you want at the best price. This level of service is why Jerry earned a
4.6/5 rating on the App Store
and made it the top insurance app in the country.
“This app is all about savings!
just saved me $193/month on my car insurance. They literally found me the cheapest policies out there and with better coverage! Seriously, just sit back and watch Jerry work its magic.” —Rachel B.
MORE: Car insurance for bad credit drivers
Let Jerry find your price in only 45 seconds
No spam · No long forms · No fees
Find insurance savings


In house financing for cars means you borrow money from the dealership itself. You then make your monthly payments directly to the dealership instead of to a bank or credit union.
Some dealerships will report your loan to the consumer credit bureaus, but others will not. If you want your payments reported, ask your dealer about their policy before you sign.
While in-house financing may seem more convenient, financing through a bank or credit union will almost always get you a lower interest rate.
Reduce your monthly car payments in minutes?
Find out if Jerry can reduce your payments by an average of $150/month
Check your rate!

Easiest way to compare and buy car insurance

No long forms
No spam or unwanted phone calls
Quotes from top insurance companies
Find insurance savings