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?

Answer
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:
ScoreInterest rate
600-66013.08%
501-60018.75%
300-50020.76%
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.
Eric Schad
Answered on Oct 20, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.
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