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What's the best interest rate I can get at a buy here pay here dealership?
I have below-average credit, but I still want to get a car loan. I've tried traditional dealers and banks, and they won't lend to me. A local dealership has agreed to take me on—but how much can I expect to pay in interest?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Buy-here-pay-here
is a type of in-house financing typically used by small or independently owned car dealerships. These dealerships have a reputation for charging high interest rates, but they will work with people who have poor credit. You just need to be aware of the current market and interest rates to avoid getting in over your head.
For example, Experian’s yearly report for 2020 published a list of average interest rates for
car loans
at buy-here-pay-here establishments. If you have below-average to poor credit (generally regarded as anything below 661), you could expect to pay the following:Score | Interest rate |
|---|---|
600-660 | 13.08% |
501-600 | 18.75% |
300-500 | 20.76% |
Because these rates are so high, it’s a good idea to shop around and try to find a different option than the buy-here-pay-here dealership. But if you can’t find anything else, this is better than no car loan. If you pay the loan off steadily, you may be eligible for car loan refinance down the line.
Make sure your new car is covered with the right car insurance, too! Use the
Jerry
app to compare quotes from top insurers, and you could potentially save hundreds of dollars a year on your insurance.View full answer
- Gregory R.
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