Can CarMax Match the Flexibility of BHPH Payment Plans?

Key Points 

• CarMax financing is an in-house financing option often offered at used-car dealerships through in-house and third-party lenders and requires pre-qualification and either a soft or hard credit pull.
• Buy Here Pay Here (BHPH) is dealership in-house financing based on your income rather than your credit history. 
• CarMax financing can be flexible, but it uses formal credit checks and reporting, while BHPH financers can offer more flexibility for those with poor credit. 

People with poor or no credit often find it difficult to buy a used car. From getting financing approved to requiring a large down payment to qualify for CarMax financing options, the process can be daunting. 

Let’s look at the difference between buy-here-pay-here vs. traditional dealership options, and how choosing a BHPH dealership can get you into the used car you need, faster, even if you have bad credit.

What Is the Difference Between CarMax Financing and BHPH?

CarMax Auto Finance (CAF) offers financing options for buyers looking to purchase used vehicles. CAF rates are influenced by the buyer’s credit and the vehicle’s condition, while Buy-Here-Pay-Here dealerships like Hawthorne Auto look at your income, not your past.

When we compare CarMax vs. BHPH financing, the main difference is that CarMax is like a traditional car dealer, offering rates from multiple lenders in the area, and BHPH does everything on its own, acting as both the seller and the lender to help Californians with low credit get fast approval. 

Why Payment Flexibility Matters for Car Buyers

Flexible payment schedules may allow you to pay off the car over a longer period with smaller monthly payments, or you can accelerate your ownership by choosing a plan with higher monthly payments. 

Payment flexibility makes it easier to complete your purchase quickly without waiting for credit approval, and you can decide how much to put down up front. 

How Flexible Is CarMax Financing?

CarMax payment plans are quite flexible, with online pre-qualification, so you can check your eligibility before committing to a purchase. Depending on your situation, you may be able to choose a loan term between 36 and 72 months. 

You can also opt to make weekly, biweekly, or monthly payments at CarMax, matching your car payment to your paydays to make life easier. CarMax Auto Finance is CarMax’s in-house lender, but like other major lenders, it uses formal credit checks and reporting. 

This means bad-credit buyers may not qualify. If you miss a payment, there’s a late fee, and the missed payment will be reported to the credit bureau after 30 days. Non-payment may even lead to repossession if the bills aren’t paid after 60 days.  

How Buy Here Pay Here Payment Plans Work

Let’s look at no-credit BHPH financing, explained step-by-step:

• Step 1: Apply for pre-approval online to learn the loan amount, annual percentage rate, and the monthly payments you qualify for. We accept all types of income, including disability, Supplemental Security income and government assistance.
• Step 2: Find the used car you wish to purchase on a BHPH lot. 
• Step 3: Meet with a Hawthorne Auto Square financing professional, provide proof of identity, residence, and income.
• Step 4: Work with our team to attain your secure financing and insurance, and set up a payment schedule that works for you. 
• Step 5: Drive your vehicle off the lot and enjoy. 

BHPH vs CarMax: Side-by-Side Comparison

So, can you get a car with bad credit at CarMax? Maybe, but it could cost you. Check out the following side-by-side comparison of in-house financing car dealers’ options:

CarMax

• CarMax credit requirements vary by lender. 
• Carmax may require a down payment, depending on your credit score. 
• The risks of CarMax financing include possible high interest rates, negative equity, and difficulty in making principal-only payments.  

BHPH

• Typically, Buy-Here-Pay-Here dealerships have no minimum credit score requirements.
• BHPH does not always require a down payment. 
• The risks of Buy-Here-Pay-Here financing include high interest rates and inflated vehicle prices from unscrupulous sellers.  
• Generally speaking, it may be easier to get approved at a BHPH dealership than at CarMax. 

Which Option Is Better for Bad Credit Buyers?

In most cases, if you have bad credit, the best option is a Buy-Here-Pay-Here program. People with a credit score below 580, a recent vehicle repossession, or bankruptcy will likely be declined by CarMax, while car financing with bad credit is almost always available at BHPH dealerships.

Common Problems Buyers Face with Traditional Financing

Hardworking LA-area drivers often face issues with traditional financing, such as:

• High interest rates with stricter loan terms.
• High upfront costs, like large down payment requirements. 
• Hidden fees. 
• High-pressure sales tactics that could influence you to pay too much.
• Slow approval turnaround times. 
• Limited financing options and lower approval amounts.
• Less ability to negotiate. 

When to Choose a Buy Here Pay Here Dealership

When deciding between CarMax dealership financing vs. BHPH, it’s smart to choose Buy-Here-Pay-Here if you:

• Have poor credit. 
• Have no credit history.
• Have faced bankruptcy.
• Cannot secure traditional bank financing.
• Want to rebuild your credit score.
• Prefer the convenience of everything occurring in one place. 

How to Avoid Bad Car Financing Deals

It’s an unfortunate truth that some car dealerships offer predatory financing options that end up costing you, with high interest rates. Some top tips for avoiding bad car financing deals when buying a used car include: 

• Checking your credit report, or getting pre-approved for a loan, so you know your credit situation before you start shopping. 
• Setting a realistic budget that includes a down payment, monthly payments, insurance, taxes, upkeep, and routine car maintenance. This way, you’ll know what you want to spend before speaking to a salesperson.
• Putting a payment down to prevent owing more than the car is worth. 
• Checking for hidden fees, such as insurance, add-ons, or extended warranties you did not request.
• Choosing a dealership that offers the best type of financing for your unique needs. 

How Hawthorne Auto Square Helps Buyers Get Approved

At Hawthorne Auto Square, rather than just your credit score, we look at your current income, making car buying a quick and painless process. Our in-house financing options are easy to understand, and, best of all, they’re affordable. 

Our extensive selection of used vehicles, ranging from barely driven electric vehicles to rugged pick-up trucks and previously owned SUVs, is now available with lower down payment requirements and lower upfront costs, so you can drive away happy.

Final Thoughts on CarMax vs Buy Here Pay Here Financing

Buying a used car instead of a new vehicle is a smart financial decision. Now that you’ve learned more about how to buy from a local dealership that offers Buy-Here-Pay-Here financing and how CarMax financing works, you’re ready to decide on the best financing option for you. 

Contact Hawthorne Auto Square Today

At Hawthorne Auto Square, our customers rate us highly because we offer high-quality vehicles with easy-to-understand financing options. Contact us today, or check out our car selection online. We’re here to assist you with every aspect of purchasing your next vehicle, from test drives to payment plans. 

Frequently Asked Questions

Why are BHPH dealerships more flexible with payments?

Buy-Here-Pay-Here dealerships are more flexible with payments because they act as both the bank and the car dealer. This enables them to create customized payment schedules that better suit their clients’ unique needs. 

Is CarMax a good option for first-time car buyers?

Yes, in some cases, CarMax can be a good option for first-time car buyers with good credit scores and money saved for a down payment. For others, BHPH dealerships are a better choice, especially those with bad credit or no credit, or those who have experienced a recent repossession or bankruptcy.

Are interest rates higher at BHPH dealerships?

Yes, interest rates on Buy Here Pay Here car purchases can be higher than those of traditional lenders, but it depends on your unique situation. Don’t hesitate to contact the sales team at Hawthorne Auto Square to discuss your financing options. We won’t pressure you, and there’s no commitment required.