Why do Buy Here Pay Here (In-House Financing) Dealerships Cost More? - King of Cars

Why do Buy Here Pay Here (In-House Financing) Dealerships Cost More?

-Video Transcript-

Why are prices higher?

Why are the prices of in-house finance and dealers, also known as buy-here, pay-here dealers, higher than the prices of your traditional dealership that offers bank financing or credit union financing? We get that question a lot so I wanted to answer that question. The reason our prices are higher for a buy-here, pay-here dealership is because of the risk that we’re willing to take when these other dealerships, banks and credit unions, they’re not willing to take that risk. They’ll simply review your application, check your credit and then just tell you you’ve been denied because either of instability on your application or your credit’s no good. A buy-here, pay-here dealer, or in-house finance and dealer, most of the time they’re not going to deny you based on credit or your application. A lot of the times it’s down payment driven.

Approvals not based on credit scores

As long as you have the down payment and you meet some of the in-house financing requirements, it’s just simple as a driver’s license or ID, paycheck stub and utility bill, then 90% of the time you’re approved. We’re willing to take that risk. In exchange for that risk, our prices are slightly higher than retail book value. Whether you’re looking at Kelly Blue Book value, or you’re looking at NADA Blue Book Value, we’re going to be slightly higher than those prices. But our customers appreciate paying the extra premium because we let them know that they’re approved and they know that there’ll be able to drive out within the next hour, as long as they bring us what we require. It’s a win-win situation. The customer gets approved and we get to sell the vehicle at a slightly higher price and take on that risk.

An alternative to traditional financing

A lot of customers that might be browsing our listings, whether they’re on Facebook, Auto Trader, Cars.com, Offer Up, they might look at our prices and be like, “Oh, this dealership’s crazy. Why are they doing charging higher when I can get this car cheaper at CarMax?” Well, CarMax is going to check your credit and they’re going to make you go through all these hoops to get you approved, while we’re going to make it real easy, regardless of your credit. In-house financing with no credit needed, that’s our specialty. We’re the in-house financing experts. If you have good credit, we might not be your best option. We’re catering to those that have been denied at banks and credit unions due to previous repossessions or a recent bankruptcy or a recent divorce. There’s several situations that these customers are in and they’re not able to get traditional financing.

A breath of fresh air

When they find us, it’s a breath of fresh air for them. They’re super happy that we’re able to overlook everything that’s on their credit and approve them for a vehicle, even if they have to pay a small premium, and as long as they just meet our in-house financing requirements and have the down payment. When you’re buying from an in-house financing dealership like us at King of Cars, we’re going to make it real simple. And it’s going to be transparent. You can go to our website, you can see all the down payment prices listed. You can see the biweekly payments listed. You can see our interest rate. You can see our term, and of course our sell price. We’re probably the only dealership in the Houston surrounding area that will offer you all that information upfront.

We’re transparent

I’m curious, if you know another dealer that’s going to offer you the sell price, down payment price, your bi-weekly payment, your interest rate and your term, all those five things transparent on their website, let me know, because I haven’t seen one. Most of these guys, they’ll make you fill out this long application. And then after you do so, they’ll give you that info. But we have that info up front. There’s nothing to hide and we’re probably the most transparent buy here, pay here dealer in town. We have hundreds of positive reviews to back that up. Just wanted to give you all some game on how the pricing works at one of these buy here, pay here or in-house financing dealerships.

We’re here to help!

A lot of times when you’re comparing apples to apples you’ll be confused. And I just wanted to clear the confusion and let you know how our business model works. If you have any questions or any comments, leave them below. Let me know. I’ll answer them. If you liked what you heard, subscribe to our YouTube channel. And if you want to buy a vehicle and you got some bad credit or no credit, visit us online, KingofCarsTX.com. See y’all later.

Dear Customer,


Our 6867 Gulf Fwy location has moved to 1102 Spencer Hwy, South Houston, TX 77587.

This location’s phone number will remain the same, so feel free to call
(713)766-1634 if you have any questions about how to get to our new location.

We want to ensure you’re able to make it to the appropriate location!