Should I Get a Car Loan through an In-House Dealer? – Auto Credit Express


In-house dealers, also known as buy here pay here dealerships, are both a dealer and a lender, so they sell vehicles and finance them in-house. Whether you should finance a car through an in-house dealership or not is ultimately up to you. However, you should be aware of what their typical requirements are, and how they differ from subprime lenders that work through special finance dealers.

Qualifications for In-House Dealers and Subprime Lenders

Before you head to your local in-house car lot, you should know how they’re different from a subprime lender. Both lenders offer bad credit auto loans, but their qualifications aren’t the same.

Let’s break down what they typically are:

  • Credit – This is the biggest difference. Subprime lenders run credit checks, whereas most in-house dealerships don’t. It’s easier to get approved for a car loan with an in-house dealer because they aren’t even going to look at your credit score.
  • Income – Income requirements vary, but both require enough available income to afford a vehicle payment. The typical standard for bad credit auto loans is a minimum monthly income of around $1,500 to $2,000 before taxes.
  • Employment – Subprime lenders require a minimum income from one source of employment. In-house dealerships are generally more lenient, and are willing to accept multiple sources of income.
  • Down payment – You usually have to make a down payment with both types of lenders. Most subprime lenders require $1,000 or 10% of the car’s selling price, whichever is less. In-house dealers, on the other hand, usually base how much money you need to put down on the price of the vehicle you’re financing.

With both lenders, you can expect your interest rate to be higher than average. This increases the overall cost of an auto loan, but you can use a larger down payment to offset the higher annual percentage rate, or add a co-borrower to potentially help you qualify for a lower one.

What Vehicles Are Available on In-House Car Lots?

Another common question we get is about what kind of cars you can expect to find at in-house dealerships. The simple answer is that they sell used vehicles, so you aren’t going to find any new cars for sale.

Don’t be surprised if you come across some vehicles that are older with higher mileage. While some in-house dealers don’t sell many 10-year-old models, others regularly do. You may have to do some searching across multiple dealerships to find the right car for you.

Looking for an In-House Dealer?

If you think an in-house dealer is the way to go about getting your next auto loan, we can help you find one. Auto Credit Express works with a coast-to-coast network of special finance dealerships that are bad credit car loan experts.

We can work to match you with a local dealer that’s right for you. There’s no obligation to buy, and our service is always free. Don’t hesitate any longer! Fill out our auto loan request form to get started today.

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