In-House Auto Financing vs. Traditional Financing


There are many steps involved when buying a car and, for some buyers, financing is the most stressful part of the process. In part, that’s because many buyers aren’t aware of the options available to them.

One example is in-house financing—also called buy-here, pay-here (BHPH). This type of financing opens the door to easy qualifying for buyers who may have a bit of trouble with traditional financing options.

What Does In-House Financing Mean?

As the name implies, it’s when the dealership extends a loan directly to you rather than relying on banks or other third-party lenders. While similar to a traditional loan in that you’ll agree to an interest rate and then make regular monthly (or sometimes weekly) payments, there are some important differences that make in-house financing an attractive choice.

In-House Financing Relies Less on Your Credit Score

If you have less-than-stellar credit, it can be difficult to get a car loan from a bank or a typical car dealership where a minimum score of 660 is desired. If yours is much lower than that, the banks view you as a high-risk borrower and may not be willing to offer a loan. If they do, you’ll be considered a subprime borrower and the terms of your loan will be much less favorable.

With BHBH financing at Owings Auto, your credit score doesn’t matter. We understand that your creditworthiness is more than just a number, so we don’t base our decision on your credit score—we base it on your present and, more importantly, your future.

BHPH Accepts Borrowers with No History

Buyers with no credit history have just as much trouble getting bank approval as buyers with poor credit history. This is especially frustrating as you can’t build a credit profile if no one is willing to extend credit to you.

Car buyers at Owings Auto are able to secure a BHBH loan even with no past loans, credit cards, or other payment history. When you take advantage of in-house financing, you’ll not only get the car you need, but you’ll also have the opportunity to build a credit history by making consistent, on-time payments.

What is BHPH Financing?

All car dealerships have a financing department, but they facilitate loans rather than extending credit themselves. This financing may be done through banks, credit unions, or financing companies. That means the criteria to qualify is the same as if you’d walked into those institutions on your own. The only difference is that the dealership does the footwork. You’ll still need a good score and strong credit history for approval.

That’s not the case with BHPH financing as the dealership is the one making the decision.

You’ll Enjoy Fast, Easy Approval

Banks are notoriously leisurely in their approval process, and the decision can take several days or longer. You may be asked to submit additional documents after turning in the initial application, and it seems like your loan has to be considered by 20 different people before a decision is made.

While all of that is going on, you still don’t have the car you need. When you opt for a BHPH loan at Owings Auto, you’ll usually get your decision instantly, so you can drive away the same day!

Examples of In-House Financing

Owings Auto is a great example of what in-house financing looks like in practice at a car dealership. When you visit our dealership, we’ll take the time to review your personal financial situation and can approve you for a loan with no credit check. Instead of sending your application to a bank, the decision is made on the spot inside our dealership. That’s why it’s called “in-house financing” and it’s part of the reason it’s so much easier to get approved for the car loan you need, even if you have a bad credit score.

The Bottom Line

In-house financing is ultimately a more flexible way to get the car loan you need. Unlike traditional methods, it doesn’t matter whether or not you have perfect credit and you can skip many of the hassles involved with a traditional loan.

Owings Auto makes car financing simple, and we’ll treat you with respect from start to finish. Get started right now by filling out our online application. After you buy your vehicle, you can make payments online right through our website. Stop by our Arlington, TX dealership today!

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