How Buy Here Pay Here Financing Works Compared to CarMax Auto Loans

What You Should Know 

• CarMax Auto Finance relies on a web of third-party lenders and soft/hard credit pulls, while Buy Here Pay Here (BHPH) dealerships like Hawthorne Auto Square focus on your income rather than your credit score.
• BHPH offers an in-house car financing, one-stop-shop experience where you choose, finance, and drive away on the same day, often in a few hours.
• Hawthorne Auto Square reports to the credit bureaus, helping you rebuild your score with every on-time payment.
• If you have an active bankruptcy or a recent repossession, traditional lenders like CarMax will likely decline your application, but BHPH is designed for these situations.

When you need a car, the sheer number of dealership financing options can feel overwhelming. In a perfect world, you have exceptional credit and can put down a substantial down payment. However, this is not the reality for many hardworking drivers in Los Angeles — especially those with bad credit or a repossession history. You can go with a huge company like CarMax or a specialized in-house Buy Here Pay Here car dealer like Hawthorne Auto Square. In this blog, we will break down the CarMax financing vs. dealership financing debate.

How CarMax Auto Finance Works 

CarMax Auto Finance operates like a traditional bank. Despite CarMax’s extensive vehicle inventory, third-party lenders typically handle financing. You’ll receive pre-approval with a soft credit check, but moving forward with a purchase requires a hard credit inquiry, which can lower your credit score—and approval is not guaranteed after pre-approval.

CarMax also offers subprime auto loans, which often carry higher interest rates and require larger down payments for buyers with poor credit. Customers with a bankruptcy or repossession on their record are generally not eligible.

What Is Buy Here Pay Here Financing and How Does It Work? (And How They Differ)

Sometimes called no-credit-car financing, Buy Here Pay Here dealerships aren’t concerned about your credit score but about your actual financial situation right now. In a BHPH model, the person selling you the car (Hawthorne Auto) is the same person lending you the money. This creates a much more favorable environment for the buyer. 

You won’t need to jump through the endless hoops required by corporate lenders like CarMax. A few pay stubs and proof of residence are usually all it takes, and you can drive a newer used car out the same day. We also tailor your payments to your lifestyle and budget, and you will earn credit with every payment. 

Buy Here Pay Here vs. CarMax: Which Option Fits Your Situation?

Our BHPH program is designed as a true step up from traditional dealerships. We approve buyers with steady income, even when credit is weak. Compared to CarMax, the process is faster, approvals are more flexible, and down payments are often just a few hundred dollars instead of $2,000 or more.

If you have excellent credit and stable finances, traditional auto loans through retailers like CarMax may offer lower interest rates. But if you’ve been denied auto loans before, BHPH bad credit auto loans focus on your ability to pay, not your credit history.

One thing to keep in mind is that going used is always a better deal than going new. New cars depreciate way quicker than used cars.

The Benefits of Financing Through Hawthorne Auto Square

At Hawthorne Auto, every driver in Los Angeles deserves a high-quality vehicle. Here are the benefits of going through us: 

• Quick pre-approval process: Can you verify your income? Do you have a reasonable down payment? Are you ready to make consistent payments? If the answer is yes, we’re ready to work with you.
• No judgment: Had a recent foreclosure or past repossession? The past doesn’t matter to us.
• Sell your car: You can sell your car and apply the proceeds toward a down payment on a car loan.
• Budget solutions: We take the time to understand your budget and never push you into a deal. There’s no pressure to accept payments you can’t afford.
• Flexible payment schedules: Is weekly, biweekly, or monthly better? The payment flexibility we offer makes a real difference in people’s lives. 
• Build your credit on the road: Our goal is for you to build your credit while driving in Los Angeles. Just make those payments, and your credit will rise.

Service Area — Buy Here Pay Here Financing in Los Angeles

Hawthorne Auto Square proudly serves the entire Los Angeles County community with BHPH financing solutions that work for real people facing real challenges. We serve drivers across Los Angeles County, including:

• Hawthorne, CA – 90250: Right in our backyard, we’ve been helping Hawthorne families get approved for years.
• Inglewood, CA – 90301: Inglewood residents know they can count on us for fast, fair financing.
• Gardena, CA – 90247: The Gardena community trusts us to deliver when traditional lenders won’t.
• Lennox, CA – 90304: We’ve helped hundreds of Lennox drivers get back on the road with flexible terms.

Which Financing Option Should You Choose?

If you have excellent credit and no financial complications, traditional CarMax financing may make sense from an interest-rate standpoint.

But if your credit needs rebuilding and you’ve already been denied by banks, BHPH offers a more realistic path. You still need reliable transportation — and you need fast approval from a lender willing to look beyond a credit score and focus on your ability to pay. That’s where Hawthorne Auto stands apart.

Get On the Road With Hawthorne Auto Square

Even with poor or no credit, you still deserve to be approved for an auto loan. While a giant like CarMax may authorize you, the chances are that you will be paying higher interest if your credit is considered “bad.” Hawthorne Auto focuses on your financial situation and will do everything we can to get you on the road. Contact us today to earn a set of new wheels. 

Frequently Asked Questions

What credit score do you need for a CarMax auto loan?

While there is no official credit score, you will likely need a score of 650 or higher. They may approve you if it’s lower, but you will be locked into a subprime auto loan at a high interest rate. 

Does CarMax offer in-house financing or just work with lenders?

Yes. But you will need a higher credit score for it to really make financial sense. 

Are the higher interest rates worth it?

It depends. When traditional lenders reject your application, securing a higher-interest loan is better than having no car and no loan approval. Plus, you’re paying for immediate access, personal service, and credit rebuilding opportunities that banks don’t offer.

Which option has more flexible payments: CarMax or Buy Here Pay Here?

Buy Here Pay Here offers significantly more flexible payment options than CarMax. Dealerships like Hawthorne Auto will work with you to find a payment plan that works for you. CarMax typically locks you into monthly payments. 

Does CarMax finance older cars the same way Buy Here Pay Here dealers do?

No. CarMax has a maximum vehicle age of 11 years. This means that if you’re buying a car through CarMax that’s older than 11 years, you likely won’t be eligible for financing through them or their lending partners. BHPH will finance any vehicle as long as it passes inspection and you can make the payments.