Have you been secretly coveting that beat-up vehicle from the “Buy Here Pay Here” lot on Main Street, hoping no one will see the tattoo of your previous repossession that shows up on your credit report? I understand. However, get ready for a wild ride because the regulations surrounding “Buy Here Pay Here” (BHPH) lots and bad credit auto dealerships are changing at the rate of a squirrel in traffic. Get the facts about this topic!
First things first: verification is taking center stage. Dealers now take more than a cursory look at your ID and most recent pay stub. Greater attention is likely to be directed towards this. Evidence of income? The norm. Electricity bills? Include them. In order to make ends meet, your aunt wrote you a note asking you to babysit on Fridays. I wouldn’t recommend bringing that, because it probably won’t fly these days. The new compliance requirements require these individuals to verify your account in its entirety.
However, it goes both ways. These days, lenders can’t use as much jargon to cover up their outrageous interest rates. They must now openly explain the terms of payment to you. The days of “gotcha” clauses hidden in tiny text or on the back of sticky notes are over. They are likely to get themselves into more difficulty than a snowman in a snowstorm if they attempt the old switcheroo.
Repeat after me: collections feel the full force of new laws. Now there’s a stricter script that those pesky reminder calls, repossession threats, and late fees must adhere to. Overly forceful methods are being eliminated. The law says “no” if a dealer calls you late at night or threatens to take your automobile on a Sunday (bad luck for them, good luck for you).
How about filing a report? In the past, some BHPH dealers would not let you see your payment history, which was bad for your credit. More and more dealers are now required to disclose this information to the credit agencies. Paying beyond the deadline hurts more. Conversely, payments that are sent on time are no longer lost in cyberspace.
Even the vendors themselves are subject to more stringent background checks. Those selling the wheels are being scrutinized by cities and states to ensure they have clean histories. No longer can unscrupulous Larry pretend to be “Car Lot King” after a few dirty deals and a smack on the wrist.
Discussing trade-in transparency is important. The old radio commercials that promised to repay the money are now being examined. All transactions, including payments, balances, and those that are rolled into your new loan, must now be documented by dealers. Less “surprise” figures to throw you for a loop in a month’s time.
Is your privacy a concern? Protecting client data is of the utmost importance to dealers. New fines apply to the sale, loss, or misuse of personal information. Someone in a back office trying to steal your information will face serious consequences. Inquire and maintain vigilance.
There may be more inquiries regarding your real monthly income, additional signatures, and fresh contracts. Jumping through hoops is one way of describing it. Calm down. While more stringent regulations may add one minute to your workday, they will allow you to perform more tricks than a birthday party magician.
Keep your wits about you the next time you’re negotiating that ride. Dealers in used cars need to adapt to the new rules of the road. More people are on your side than ever before in case anything seems off or like a repeat of dealer drama. Even while cars nowadays have a lot of extra features, the fine print should be just as extensive.