buy here / pay here - but not too much, hopefully?
June 27, 2012 7:19 PM   Subscribe

I need a reliable car that I can count on. I'm a person with pretty bad credit, but I have a steady income in a job I've had for a while. What are my options? I'm thinking hard about checking out a used car lot; what should I look for, loan- and car-wise?

I have bad credit. As in: banks will not loan money to me, even small amounts. (I have checked recently.) I'm working on restoring my credit, but at the moment, I find my old, broken-down car has died pretty completely, and I need a new one as soon as I can find it.

I've narrowed down what I'm looking for. I'd prefer to get a truck. I'd like to pay around $2,000 to $3,000 for it; looking at Craigslist, at dealer and by-owner listings, it looks like I have some good options in that range. I can put up between $500 and $700 down on a car; the rest would have to be a loan.

I see a lot of these "your job is your credit" places, and some of them don't look too terrible. However, I hated the idea of getting another loan, so I went around to all the banks and credit unions in town to try to see if they'd loan me money for this. They would not.

Now that I've exhausted that possibility, I'm thinking my only real option is to try a "your job is your credit" used dealer, attempting to find one that isn't too skeevy and shopping the loan a bit to make sure I won't get completely screwed.

Can anyone offer any tips here? What should I look for in a loan - interest rate, repayment schedules, etc? Are there any warning signs I'll see at dealers that should scare me away?

Thanks in advance for help. I'll be around to answer questions and update.
posted by koeselitz to Travel & Transportation (28 answers total) 6 users marked this as a favorite
Search used cars here - this comes up every two weeks and the answers about which cars to buy don't really change. If you have crappy credit you will pay credit card rates for the car loan - don't do that. Buy what you can pay cash for, and be prepared to take a few weeks to find the right car. Don't be in a rush.
posted by COD at 7:42 PM on June 27, 2012 [1 favorite]

Response by poster: I've looked at the other questions posted here - yes, it does seem to come up every few months - but there are a few extra things I'm kind of wondering that they didn't cover. I can't really afford to wait at the moment, and I don't think it would get me much. I know I'll pay a bit more this way, but it will be worth it to me. Moreover, I'm not looking to spend $10k+, as most posters here seem to be; I'd rather keep it below $5k if I can.

So, more than just whether it's a good idea, I guess I'm mostly looking for advice on how to do it without getting scammed.
posted by koeselitz at 7:57 PM on June 27, 2012

Response by poster: Oh, and I should add - I have a mechanic friend lined up for the inspection, so I've got that covered; and I'm going to make sure going in that that's an option for the dealer.
posted by koeselitz at 7:57 PM on June 27, 2012

I work in auto loans for bad credit. Our base rate is 28% and usually we require a $1000 down payment, although of course YMMV. We also loan to NADA clean trade in value, so you can probably use that to find out if a car you're interested in is a good buy.

Find out how exactly the interest is being accrued in your account--if it's simple interest, you can make payments as big as you can afford to get your loan paid down much more quickly. After you've had that loan for a few months (about sixish, no less than 3) you could start looking at places like Springleaf to get a better rate.

Do not go in the dealership looking desperate, because they will use that to screw you over. If it looks crazy cheap, ask if the title is a branded title. You may be ok with it, but if you try to resell the car it drastically lowers the value of the car. GET THE CARFAX. Get any verbal promises in writing.
posted by cobain_angel at 8:10 PM on June 27, 2012 [4 favorites]

I think you're already on the right track. You know you're going to pay more at the places you're looking at, and you've got a mechanic lined up. Standard don't be picky rules apply. If the dealer knows you want *just that car* then you've already lost. Be prepared to walk away. etc. etc. Whatever you do read the fine print carefully... one late payment and they can repossess the car? Walk away. I think it was here or over on fatwallet where a post recently mentioned how one of the scammiest things these places do is profit from a sale, repossess the car, and then sell it again for more profit.
posted by one4themoment at 8:11 PM on June 27, 2012 [2 favorites]

If you've got the mechanic lined up, go private party. You'll save money, and used-car dealers are pros at hiding things like individuals are not.
I know you said "truck" but you can carry a lot in a 1998 Civic...I used a 1990 CRX (with a bike rack) as a work truck for a couple years.
posted by notsnot at 8:11 PM on June 27, 2012 [2 favorites]

In fact this may have been the article referenced: Buy here pay here Don't know if it will help in your decision...
posted by one4themoment at 8:14 PM on June 27, 2012 [1 favorite]

Be forewarned that you may need to bring your mechanic with you. I shopped private party (everything dealers had in my price range was terrible) and most sellers were not keen on me taking the car anywhere to be inspected. Actually, they all outright refused.
posted by Anonymous at 8:20 PM on June 27, 2012

There are a lot of predatory auto lenders out there; it's not a well-regulated industry. The Center for Responsible Lending, a nonprofit consumers' rights organization, has some good information on what to look out for and you might find some helpful info there.
posted by aka burlap at 8:35 PM on June 27, 2012 [3 favorites]

IMO, if you can't get a loan from your bank/credit union, you should really just not get a loan. Your $2-$3k car is going to end up costing $5-6k. Put off getting a car for as long as possible, save up as much money as possible, and pay cash for what you can get. You just need it to last a couple years so you can pay off the debt that's keeping your score down.
posted by kavasa at 10:18 PM on June 27, 2012

For example, a long time ago my dad inherited a 1975 Pontiac when his parents passed. They'd driven it very little. He gave it to my sister so she could drive to and from college in a nearby state. When she graduated and purchased her own car, it got handed down to me, and I drove it in highschool. I got it into one accident, and the AC stopped working, and the trunk was kind of rusted through, but it ran. During the decade or so that us kids abused that poor thing, my parents spent under $100 on repairs for that thing. We sold it for, I think, $250 to a painter that needed a car he could drive to and from work without worrying about covering the interior in paint. I'm pretty sure that car served him well for several years.

That's the sort of thing you're looking for.
posted by kavasa at 10:22 PM on June 27, 2012

Response by poster: That kind of thing is insanely difficult to find, is the thing, kavasa – at least in my experience. I know cars relatively well (have changed a transmission, though only once) and I will be able to see if a car is golden like that. But I can't even find anything for remotely that much. I will have, tops, maybe $800 to work with to put down on this car; there's not a whole lot on Craigslist for that price. I will keep looking, though, since that's the best one can do.

I'll tell you what I am going to do, though. I haven't talked much about this with my mechanic friend, but tomorrow I'm going to sit down and pick her brain about trustworthy sellers she might know and, what would be nicest, good deals she may have heard of on cars recently. We'll see what I can find that way.

I know what you mean about buy-here-pay-here places being scammy, though. I waited as long as I could and saved up as much as I could on this, just to try to avoid that eventuality. I'm staring it in the face now because I think I can't really afford to wait any more. Today was the third time it died and I had to call my girlfriend for help, and the second time I've had to have a friend help me tow it. It's pretty much time now, I think. Maybe a week or two more of this is all I can take.

By the way, I'm in Albuquerque, if it makes a difference.
posted by koeselitz at 10:32 PM on June 27, 2012

Response by poster: All that said, I take your point, kavasa. I have to say – one of my personal feelings is that bare mileage really isn't a very good indicator of the quality or durability of a vehicle. I've met cars at 200,000 miles that were clearly going to last longer than cars I've met at 30,000 miles; it all has to do with how they're cared for. The 1975 Pontiac you're talking about is like that; it wasn't about the mileage on the thing at all, it was about how it'd been cared for. So I have my eye out for cars like that, which less attentive buyers might not realize are gems. We'll see what comes up.
posted by koeselitz at 10:35 PM on June 27, 2012

Try to find a private sale car with significant cosmetic damage. I just got rid of an old civic for 2k, with a sideswipe it would have gone for less. The car was probably good for another 50k miles. Save up and use the money to fix the cosmetic damage when you can, rather than pay usurious rates for a loan.
posted by benzenedream at 10:59 PM on June 27, 2012 [1 favorite]

There's bad credit - and then there's bad credit. Talk to a credit union, or look at used cars at a large, reputable used car dealership (they will usually have a new car dealership in the area as well.) The rates they offer may be steep, but they won't be usurious like the buy-here-pay-here dealers and franchises... unless you have no credit history at all, or have a few judgements and outstanding bills out there against you, even middling-to-poor credit can generally get an auto loan.
posted by Slap*Happy at 6:04 AM on June 28, 2012

Response by poster: Heh. That's true about bad credit, Slap*Happy. Last week, the two biggest credit unions in Albuquerque told me they wouldn't even let me open an account (!) because my credit is so bad. Maybe I will try a larger dealership, though.
posted by koeselitz at 6:25 AM on June 28, 2012

A few years ago I used CARFAX and located a suitable used car at a local dealer. They offered financing, but I didn't need it. It was a regular dealership, I think maybe Honda, they sold new and used cars, it wasn't one of those no credit/low credit kind of places. The car I got was a trade-in with some minor (in my mind) cosmetic issues. It's a minivan, doubles nicely as a truck.
posted by mareli at 7:01 AM on June 28, 2012

One of your biggest challenges will be that dealerships just don't sell $2,000 to $3,000 cars -- even the skeeviest used car lots are starting in the $7-8k range for 100,000+ mile beaters.
posted by M.C. Lo-Carb! at 7:41 AM on June 28, 2012

I've never bought from a buy-here/pay-here dealer, but I have employees who do. (They earn good salaries, but they have perennially destroyed credit and as far as I can tell just prefer to buy cars that way.) My observation is that not only is it a crazy expensive way to buy a car (and will come with things like the dealer calling your boss repeatedly if they even think you are going to miss a payment -- I couldn't begin to count how many of those phone calls I have received), but that a lot of the cars are in pretty crappy shape. That makes sense when you think about how often a given car might have been sold, driven hard, repossessed, and then resold, all with no maintenance. But they are priced as if they are perfect (and always nicely detailed before the sale), plus all kinds of fees -- the high interest rates are only the tip of the pricing iceberg.

If you can live with some deferred gratification, you'll save huge money by either repairing what you have, or by buying a series of cheap beater cars/trucks for cash until you have saved enough to get something better. I just took a look at ABQ Craigslist, private party only, $1000 max price, and there are definitely some trucks there that I'd buy. I've owned multiple sub-$1k trucks, and they are all crappy and will need work, but are super cheap to keep on the road. And if they have a serious breakdown, you just sell for parts and buy another.

The point being, I think you have options that are worth exploring; it doesn't take very long of not paying extortionist interest and fees (as well as recognizing that their business model is often not based on you finishing the loan and keeping the car) for you to get significantly ahead. I've read on previous threads on MetaFilter about people having highly positive experiences doing the buy-here/pay-here route, but my view of it suggests to me that it is generally a very, very bad idea.
posted by Forktine at 7:53 AM on June 28, 2012 [2 favorites]

Yeah, getting onto a Buy Here, Pay Here, JD Byrider, DriveTime kind of deal is just not in your best interest.

Forktine has a point, there are a ton of decent vehicles on Craigslist under $1k that you should investigate. The Ford Festivas alone!

It will be so much better to just buy a beater outright, than to be in hock to an overpriced car lot.

PLEASE consider this!

I am driving a 7 year old Honda Accord with 85k miles on it. I will drive it until I win the lottery or the wheels fall off, whatever comes first.
posted by Ruthless Bunny at 8:22 AM on June 28, 2012 [1 favorite]

Response by poster: Ruthless Bunny: “I am driving a 7 year old Honda Accord with 85k miles on it. I will drive it until I win the lottery or the wheels fall off, whatever comes first.”

I am driving a beater right now. Man, I really, really wish I could afford something as awesome as a 7-year-old Accord with 85k miles on it – that sounds like a dream of a car. I am driving a 20-year-old Dodge Spirit with 160k miles on it, bad gaskets all over the place, and chips in the flywheel that keep it from starting every few weeks. This one is pretty much ready to go into the ground. I can replace the flywheel, but not quickly, and I don't really want to do it this moment.

I'm going to do my very best to find something on Craigslist or from a private seller elsewhere, folks. Thank you for all your good advice. I have a feeling my mechanic will confirm it for me, anyway, and hopefully she'll know some good sellers.
posted by koeselitz at 10:53 AM on June 28, 2012 [1 favorite]

I am driving a beater right now. Man, I really, really wish I could afford something as awesome as a 7-year-old Accord with 85k miles on it – that sounds like a dream of a car.

Hey Koeselitz,

Yeah, I know. I bought it new and suffered through paying a huge note for 60 months to own it outright. I am hoping to get another 10 years out of it. I just remember how painful it was to choke up the payments each month. This was after years of profligate car buying and trading and buying again. I was SO upside down in my car and the payment was SO high!

I suppose its remembering that pain that keeps me happily perking along in the Accord. Interstingly enough we paid off Husbunny's Element. After 60 months of that car note, he only has 23k miles on it! He never gets another new vehicle ever again! (at that rate, he'll never need another one).

Good luck. It's just a vehicle. I'm sure you'll get an awesome deal.
posted by Ruthless Bunny at 11:21 AM on June 28, 2012

That sounds like a good approach, especially asking your mechanic if she knows of any good deals. People fairly often sign over cars to mechanics, so she may actually have something to sell herself.

I'd also suggest directly asking your mechanic: "I have exactly $700 (or whatever the amount you have really is) and not a penny more. I need to get to work every day. What will keep me on the road the longest: buying the best car I can find for under that amount, or putting that money into my Dodge and start saving for a new vehicle in a year or two?" My guess is that you will get further with your current car, but I'd listen to your mechanic on this one.

According to the loan calculator at, a five year loan for $4000 at 28% will have a monthly payment of about $125. If you could set that much aside for even a few months, you'd have double the car budget you have now. (Also, do the math: that's a total loan cost of $7500 and a loan term that will last well past when the "new" car will start having expensive mechanical issues. The guys I supervise treat these more like car rental programs -- when they get tired of the car or it starts having issues, they stop making payments, the car gets repoed, and they have their buddy give them a ride to another car lot and the whole thing starts over.)
posted by Forktine at 11:27 AM on June 28, 2012 [1 favorite]

One of your biggest challenges will be that dealerships just don't sell $2,000 to $3,000 cars -- even the skeeviest used car lots are starting in the $7-8k range for 100,000+ mile beaters.

There are small used-only car lots in Santa Fe that sell cars in the 2K-4K range -- "Great Little Cars" on Cerrillos / Cordova has a few cheaper cars, and there's a new place on the corner of Cerrillos and St. Michael's, but I forgot the name (I noticed that one had a number of cheap cars out front). Albuquerque is probably similar, you just have to find the right place.
posted by vorfeed at 12:10 PM on June 28, 2012 [1 favorite]

May not be what you're looking for, but older volvo's engines last a really long time and the amount of space around the engine makes it very easy to work on yourself. I purchased a 1985 volvo 245 wagon 2 years ago for 800... since then I've replaced brake pads, oxygen sensor, and spark plugs/wires, cleaned the mass airflow sensor, replaced a hose or two and paid to have the tailpipe, two tires, and the timing belt replaced (probably about 600 total). It runs better now then when I bought it, and the amount of storage available is, in my mind, equivalent to a small truck.

I see old 240 sedans and wagons on craigslist here all the time ranging from 600-2000. There are also a few great online resources dealing with old 240s.

I've had fun sort of teaching myself how to fix things, but I also might have been lucky to have found a decent car at that price. I also generally bike to work, so although my car has been reliable since I got it, if something were to go wrong, I wouldn't need to be in a rush to fix it.

Just a thought.
posted by czytm at 5:43 PM on June 28, 2012

The car lot at Cerrillos and St Mike's is called "Autowright Wholesale". Dunno of that'll help, but there it is.
posted by vorfeed at 7:28 PM on June 28, 2012 [1 favorite]

You have probably already considered this, but just in case: could you get by with a motorcycle, scooter, bicycle, or bus, at least temporarily in order to save up the cash for a car?
posted by hishtafel at 9:36 PM on June 28, 2012

My son's car (my old car) is a 97 Mazda 626 with 175K miles. Retail value on Craigslist would be $999 if I'm lucky. I would have sold it earlier this year when we bought a new car, if I didn't have teenagers that could use it. I spent $125 to repair a transmission leak back in Jan. It has run flawlessly since then. There are good cars available cheap - you just have to be willing to wade through a lot of crap to find them. Focus on service records. I have a spreadsheet with 12 years worth of maintenance recorded, and a folder with all the supporting receipts. IMHO, when buying sub-$1000 cars, how well it has been maintained is way more important than the brand or model.
posted by COD at 5:24 AM on June 29, 2012

« Older A tooth fairy gave me some teeth - what do I do...   |   I-80 road food? Newer »
This thread is closed to new comments.