What Is In-House Financing? | Finding In House Financing Car Dealers

In-house financing can offer you the opportunity to get behind the wheel of the car you need, even if you’ve been turned down by a bank. It’s an option worth considering if you have less than perfect credit. However, it may not always be the best choice for you when it comes to financing your auto purchase. Here at #1 Cochran, we’ve built up a vast amount of experience in working with Ohio drivers to secure auto financing that meets their needs. If you’re unsure whether in-house financing is right for you or you have questions about how it works, here’s an overview of some key points to bear in mind.

What Is In-House Auto Financing?

In-house auto financing is when a car dealership provides financing directly to a customer wishing to purchase a car. This differs from a traditional auto financing agreement, which is usually offered by a bank or other financial institution. In-house auto loans are also sometimes referred to as buy here, pay here financing.

The terms of in-house auto loans can be set by the dealership themselves in consultation with the customer.

What Are the Pros and Cons of In-House Car Financing?

In-house auto financing comes with many benefits. The first is that because dealerships can set their own lending terms, they can offer loans to customers with poor credit or no credit score at all. As a result, people normally excluded by banks from receiving an auto loan can secure car financing, allowing them to purchase a vehicle.

Since dealerships set their own lending terms, buy here, pay here loans can be finalized much more quickly than a traditional bank loan. In some cases, it will be possible to complete the arrangements during the course of a single visit, letting you get behind the wheel of your chosen car right away.

A further advantage of in-house financing is that the dealership can work with the customer to adjust the loan’s terms to accommodate their needs. For example, the common requirement for someone to make a substantial down payment to get a bank loan is not necessary with a buy here, pay here loan. Alternatively, the dealership may include the cost of an extended warranty or service contract as part of the loan deal, which will help you manage the cost of any future repairs or maintenance work.

There are some instances where customers may be better suited to a traditional bank loan. For instance, someone with a good credit score may be able to secure better terms with a financial institution than a dealership can offer.

Another potential drawback to in-house auto financing is that the payment terms may be less convenient. Some dealerships require you to make payments twice a month or weekly in cash, which can result in you having to make several trips to the dealership.

Several buy here, pay here dealerships may attach a tracking device to the car you buy. This is because they may want to monitor how you use your car so that they can repossess it more easily if you miss your payments. Many people see this as an invasion of their privacy, which is why it’s another downside to buy here, pay here financing.

Some dealerships offering buy here, pay here financing may sell you a car at an inflated price, since they control both the terms of the loan and the price of the vehicle you’re purchasing. This can result in you paying more than what the car is actually worth. The consequence of this could be that you end up being upside down on your auto loan.

Can an In-House Auto Loan Improve My Credit Score?

Yes, provided that the dealership reports your payments to the credit rating bureaus and you make your payments on time. However, keep in mind that an auto dealership is not required to do this. That’s why it’s important to ask the dealership whether they report your payments before you agree to take out a buy here, pay here loan.

Are There Alternatives to In-House Auto Financing?

Here at #1 Cochran, we can offer several alternatives to in-house financing that may be better suited to your needs. Dealer-arranged financing is one of them. This is when the dealership talks to potential lenders on your behalf to secure a competitive loan deal. Our team of finance experts has built up years of experience in helping customers to secure auto financing from private lenders on good terms.

Another alternative is to speak to your bank or credit union to see if they can offer you favorable terms. If you’re struggling to get an offer because of your credit score, you may want to consider getting a co-signer for your loan. This is when a family member or someone you trust co-signs your loan agreement so you can benefit from their credit score. If you choose this option, remember to explain to your co-signer that they will be liable for the debt if you fail to make your repayments.

You may also want to check out our Path Credit Program here at #1 Cochran. As part of this initiative, we can provide auto financing to you, even if you have bad credit or need to rebuild your credit score. After completing a straightforward pre-approval application, one of our finance team members will reach out to you to walk you through the process and help you get your dream car.

Secure Auto Financing at #1 Cochran in Youngstown

#1 Cochran has been serving Ohio auto customers like you for over a century. We know that not every auto buyer has great credit, and we want to do everything we can to help you get the financing you need to complete your next purchase.

If you have questions about auto financing, don’t hesitate to reach out to our helpful finance team. We can work with you to achieve a competitive auto loan deal so you can drive your chosen new or used car off our dealership lot.

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