How to exit a Buy Here Pay Here contract

Unfortunately, to get out of a purchase contract here, pay here (BHPH), you can’t just return the vehicle to the parking lot and leave if you haven’t finished paying. If you do, it is considered voluntary repossession and negatively affects your credit score. As with any auto loan, you are bound to the conditions set out in a signed contract. While you can’t just return your vehicle and stop paying, you don’t always have to stick with a car you don’t want if it isn’t paid for – there are options you can consider. to get out of a purchase contract here pay here.

Exiting a BHPH contract: the first step

If you are determined to get rid of the vehicle and know there is a loan balance left, you must first get a refund amount from the lien holder. The repayment quote should state 10 additional days of interest from the date you request it, along with any prepayment charges or penalties, if applicable. This allows the lender to receive the repayment funds for 10 days.

Once you have the quote, you need to have the car appraised by at least two dealerships, but more is better for you. Then you can compare the offers and determine the best deal for you. When you have the valuations, you then need to determine if you have equity.

Equity is when your vehicle is worth more than what you owe on the loan. To find out your financial situation, simply subtract the amount of the gain from the appraised value. If the amount is positive you have equity, if it is negative you have negative equity, which means you owe more on the loan than the actual cash value of the car.

3 options for exiting a BHPH contract

Once you have determined your financial situation, you can choose the route you wish to take to dispose of your BHPH vehicle. The options vary, but there are usually three to choose from:

  1. sell it yourself – You can usually sell a car privately for more than a dealership would give you. It’s a good option with negative equity if you can sell it for as much or more than the remaining loan balance.
  2. Trade it in with another dealer – If you have equity and no longer want to work with a BHPH dealer, you can simply swap it with another dealer.
  3. Return the vehicle to the BHPH batch – If you have equity and want to work with the same dealer again, you can exchange it on the same lot you bought it from.

If you have negative equity, that can complicate the situation a bit more. You will be responsible for the difference between what you owe and what you can get for your car. If you trade it in, you will either have to cover this difference with your own money or build it into your new loan, that is, if the lender allows you to do so. We do not recommend roll over negative equity into a new loan.

The bottom line

If your vehicle is not reimbursed, don’t just report it back to the BHPH lot. This means that you are giving it up voluntarily and it could be listed as repossession on your credit reports. Make sure you take the proper steps to determine your financial situation and repay the loan if you want to get out of a BHPH contract.

However, if you need help finding a special financing concessionaire work with, Auto Express Credit has you covered. We have an extensive network of special finance brokers across the country who can help you get a car loan.

Our process is fast, free and easy to get started. Simply fill out our non-binding form car loan application form, and we’ll get to work to connect you with a local dealer!

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