Why buy here pay here are bad?
You're right, buying a used car from a “Buy Here, Pay Here” lot is a bad idea. Such a car is a lemon: it has a high rate of problems and the interest rates are high. These lot owners are not in business to do you a favor. They make their profit by selling cheap cars and financing them with high interest rates. The other way to get a used car is to buy it from a private seller. When you buy a used car private sale, you get all the information about the car and can decide if the price of the vehicle is fair. You can get a car that has been owned by someone who was meticulous with maintenance, or you can get a car owned by a smoker, a teen, or a hoarder. That's why it's so important to ask the right questions when buying a used car, and to make sure the dealer will give you an accurate answer.
They are bad because they often try to take advantage of a person's financial situation in order to make a sale. As you probably know, many people who own cars without credit histories are considered subprime auto loan candidates. This means that they have a poor credit history or are new to the country and do not have a credit history at all. One problem for these individuals is that it is very difficult for them to pass the credit check required for a traditional auto loan. However, some car dealers see this as an opportunity to make money.
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Generally, buy here pay here car lots are not that bad. If you cannot get a loan through traditional methods, you might as well consider buying a car from a buy here pay here dealer. Yes, they definitely cost more than a dealership and yes, they'll require you to put more money down and they may charge you more in interest, but they'll still sell you a car. Thanks to their policies though, the car will probably be in rough shape. But if you're smart, you'll be able to get it into good shape and will be driving a good car for a fair price. There are many worse case scenarios that exist for people who have bad credit.