A Look at Buy Here/Pay Here Dealerships

We all know that car dealerships should be honest and dealers should help consumers find vehicles that work for them and their families. Unfortunately, this is often not what happens. Car dealers can use unethical tactics and may hide information from consumers.

Car manufacturers can also end up making and selling cars that aren't what consumers expect or deserve for their hard-earned money. There are consumer protection laws that help car buyers under certain circumstances and a Sacramento lemon law firm can help consumers determine if they have legal remedies when problems arise.

Unfortunately, sometimes car buyers who are treated badly by dealers don't really have a lot of options.  One problem may be that dealers may be legally entitled to do certain things that have an adverse impact on consumers. Buy here/pay here dealers, for instance, may not be a good place for car buyers to shop, as the business practices of these dealers typically are not illegal. Recently, John Oliver provided some insight on his HBO show into all of the problems with buy here/pay here dealers.

The Problems with Buy Here/Pay Here Dealers

Buy here/pay here dealers are car dealers who sell cars and offer financing to the consumers who buy them. These dealers often cater to people who have bad credit.  While some of them run their businesses in an honest way and truly help consumers, many others do not.

As John Oliver explains, many buy here/pay here dealers have very high interest rates. The interest on the car loans they offer average around 19 percent but can reach as high as 29 percent.  Between interest charges and other costs like markups and fees, a person who purchases a $3,000 car may end up paying three or four times the value of the vehicle during the time the car loan is in effect. 

Buy here/pay here dealers frequently solicit people coming out of bankruptcy for sub-prime loans, and many dealers do not do any type of credit check at all. Many dealers put devices into the vehicles which emit beeps when payments are due (and they do not stop beeping). At midnight after the payment is late, the device can automatically cause the car to stop operating.

Another issue is that buy here/pay here dealers often provide no flexibility on payments and are very quick to repossess.  One single late payment often results in the car being repossessed.

In one situation reported on by Oliver, the car was actually repossessed while the owner's child was still inside of the car. Cars are often sold and repossessed multiple times, and often consumers are expected to continue to make payments when the car has been repossessed -- yet, the car is worth less than what the consumer owes.

Consumers should not be treated badly by dealers or manufacturers.  At The Bickel Law Firm, our attorneys can provide help in certain circumstances where the law provides you with a remedy as a result of problems with your new cars. Contact our firm if you are having vehicle issues.