Have you heard the term "Buy Here, Pay Here" and wondered what it meant? "buy here, pay here" is a certain type of car dealer that generally targets customers with bad credit. As its name would imply, you buy the car from their onsite lot, and then make the payments regularly at this location as well. "Buy here, pay here" car lots do not permit outside financing; you must use their in-house financing if you wish to buy a car from them.

Advantages of Buy Here, Pay Here
"Buy Here, Pay Here" is a great option if you have bad credit. If your credit is extremely bad, it might be the only option available to you. The process of getting a car at a "buy here, pay here" lot is in refers of what most people are used to. Rather than first picking out the car, your first stop will be at the finance department. They will take your information, including the amount you have for a down payment and your monthly income. Using this data, they will determine what you can afford. From there, the options available to you will be presented. The advantage of doing this is that you know you will be purchasing something within your means. "Buy here, pay here" lots also are more lenient when it comes to trade-in vehicles. They are more willing to accept older trade-ins. While normal dealers will sell their older trade-in vehicles to wholesale buyers, a "buy here, pay here" lot can put them on their lot for future buyers, which means greater profit for them.

Disadvantages of Buy Here, Pay Here
"Buy here, pay here" lots have notorious reputations for being extremely strict about their payment schedules. It's not uncommon to make weekly or bi-weekly payments for this type of dealer. Some "buy here, pay here" lots will require you to set up automatic withdrawal from your checking account. For those that do not, other methods may be employed to ensure that you pay on time. Some "buy here, pay here" lots install timers on their cars. Each time you make a payment, the timer is reset. If you miss a payment, the timer will shut the engine off and render the car useless.

"Buy here, pay here" lots are strict but, if you pay your payments on time you can help improve your credit rating. Consider "buy here pay here" as an option if you are working on rebuilding your credit.

The process of going through a bankruptcy is comparable to getting a root canal, and some may argue that the root canal is the more pleasant experience of the two. While the root canal process is often painful, the effects do not last nearly as long as the bankruptcy. If you have recently come out of a bankruptcy or are in the process of filing bankruptcy, here are some things to keep in mind.

1) Bankruptcy does not follow you forever...although it may feel like it sometimes.
Make no mistake about it, filing for bankruptcy will significantly impact your credit score. However, it does not stay on your credit report forever. A chapter 7, chapter 11, or chapter 12 bankruptcy will stay on your credit score for 10 years from the date of filing. A chapter 13 bankruptcy can stay on your credit for up to 10 years, but typically they are removed after 7 years. While 7 to 10 years is certainly a significant amount of time, most would agree that it's definitely shorter than "forever"!

2) A bankruptcy has less weight on your score as time goes by.
The first year after your bankruptcy will be the most difficult, but the bankruptcy will have less of an impact on your credit store the further you get away from it. In fact, you may find that within two or three years you have built enough of a record of good payments that the bankruptcy doesn't matter so much.

3) There are auto lenders that specialize in customers with bankruptcy.
Having a bankruptcy might make you feel as though you've contracted financial bubonic plague. Many lenders will turn away customers as soon as they find out about the bankruptcy. However, there are auto loan lenders who have made it their business to give bankruptcy customers a second chance. The internet can be your friend in finding a good car loan with a bankruptcy. Some internet companies have built a network of lenders, who will compete for your business even if you have bad credit or a bankruptcy.

Do not lose heart if you have had a bankruptcy. It is possible to survive and even thrive in the midst of cleaning up your credit score. Over time, you'll be amazed at how easy it becomes to refinance your loan or get a loan with good terms, even if you have had a bankruptcy a few years ago.

Going through a bankruptcy can be a very emotionally-charged process. It's easy to feel as though your life has been altered forever, and that perhaps you have failed in some way. Take heart, many people have recovered from a bankruptcy, and you can too. If you are in need of a car loan after filing for bankruptcy, here are some things to consider.

1) Interest rates and down payment requirements may be higher, at least at first.
Lenders view car buyers with a bankruptcy as a greater credit risk. As such, the interest rates for car loans with a bankruptcy tend to be high. The lender also might require a substantial down payment. However, if you make your payments on time consistently, you can negotiate better terms and refinance within a year or two at a lower rate. Your on-time payments will have the added benefit of helping you rebuild your credit.

2) Time is your friend.
The year following the bankruptcy filing is the toughest. After the first year, creditors will take into consideration your history of making payments on time. If it's been a few years since you've filed for bankruptcy, and you've been diligent about paying your bills on time since the filing, the bankruptcy will have less of an impact on your credit score.

3) Buy used.
For those with bad credit or a bankruptcy, an older, used car can be a great option. Used cars are always sold at a lower price, meaning that you will need less money for the loan. You'll be able to stay within budget on a used car and make your payments reliably.

4) Shop around.
Although each lender may make you feel as though they have "the best deal in town", don't believe them until you have shopped on your own. You may be surprised at how much the terms for car loans differ among lenders.

Getting a car loan with a bankruptcy can be more difficult but it is certainly not impossible. Take comfort in knowing that you have the power to improve your credit score, and within even just a year you can start to turn things around.

Some car dealers require good credit and a secure, steady income before they agree to finance a vehicle, which requires a reliable job. For many, this is a catch-22, as a reliable job requires transportation, and public transportation is not always available where they work. However, this does not mean financing is impossible. Subprime car loans are specifically designed for individuals in this situation.

A subprime car loan refers to the financial candidate. When financing via subprime car loans, the bank does not view him as an ideal candidate to lend money to because he may have poor credit, no credit, or a poor employment history. But nonetheless, the car dealer or finance company will frequently offer the loan, but with a higher interest rate than what they would offer to an ideal loan candidate. This allows the company offering to make a higher profit off of those with poor or no credit that pay off their loans.

The loan officer or financial institution is not the only one that profits. The purchaser not only gets a loan, but by making payments on time, he can start to repair, improve or establish credit. This establishment of credit offers opportunities to the borrower in the future. Establishing this credit history can allow him to refinance the loan in the future at a lower interest rate. This opportunity to prove he is credit-worthy also allows him to improve his chances to qualify for other forms of credit in the future such as car loans. Other benefits are he can improve his chances of being approved to rent an apartment based on the credit he established. Having a vehicle to get to and from work could be the biggest benefit of the subprime car loan.