---
title: "Sometimes Buy-Here Pay-Here Dealers Really Do Get Screwed"
description: "The average loss on a repossession is now nearly $6000. You can thank one third of their customers for that honor."
date: "2017-08-04"
modified: "2019-04-16"
authors:
  - name: "Steven Lang"
    link: "https://www.thedrive.com/authors/steven-lang.md"
url: "https://www.thedrive.com/article/13225/sometimes-buy-here-pay-here-dealers-really-do-get-it-in-the-ass"
categories:
  - "News"
tags:
  - "Car Buying Advice"
  - "used cars"
---

# Sometimes Buy-Here Pay-Here Dealers Really Do Get Screwed

![](<https://www.thedrive.com/wp-content/uploads/images-by-url-td/content/2017/08/rockys-bhph.jpg>)
*\<em\>www.thedrive.com</em>*

Would you ever finance your car to a stranger for $500 bucks?

Before you say, "Hell yeah! What a great deal! Give them my keys!", let me offer you a few words of caution.

About a third of these deals go south. Not South as in Alabama. But south as in, "This car is now worth more dead than alive. Who the hell in God's green Earth uses 17 [air fresheners](<https://www.thedrive.com/category/accessories>) and then leaves a pile of leftover half-eaten Mickey D's in the back! "

The average default car at a buy-here pay-here lot usually lasts about 22 months before it's repossessed according to the National Independent Automotive Dealers Association. Given that a large bulk of these deals are designed to last two years, that's pretty bad timing for the owner, but damn good for the dealership.

There is a nice thick silver lining with plenty of gold trimmings on top of that. First, you can sell that car again. Second, most Americans are still incredibly bad at math and third, the average deal that goes south still gets over 76% of the initial finance proceeds before the car is put back on the road again.

It's not all gravy. The Buy-Here Pay-Here business still has profit margins that are far lower than other legalized land sharking operations such as check cashing, title lending, and conventional banking in today's 'too big to fail' economy. Local revenue generating operations from cities that operate speed traps are also far more profitable. Keep that in mind when you're shopping for a used car with a low down payment.

### Author social links

## More

- [Where Do Car Dealers Buy Their Used Cars?](<https://www.thedrive.com/article/13212/where-do-car-dealers-buy-their-used-cars.md>)
- [Why Do Old Hondas Cost So Much?](<https://www.thedrive.com/article/8089/why-do-old-hondas-cost-so-much.md>)
- [How to Buy a Car from a Buy Here, Pay Here Dealership Without Getting Screwed](<https://www.thedrive.com/news/45028/how-to-buy-a-car-from-a-buy-here-pay-here-dealership-without-getting-screwed.md>)
- [The Best Place To Buy A Good Cheap Car](<https://www.thedrive.com/cars-101/7543/the-best-place-to-buy-a-good-cheap-car.md>)
- [With Used Cars, You Get What You Pay For](<https://www.thedrive.com/vintage/6543/with-used-cars-you-get-what-you-pay-for.md>)
- [This Dealer Will Pay Customers’ Mortgage for Two Months If They Buy a New Car in April](<https://www.thedrive.com/news/32888/this-dealer-will-pay-customers-mortgage-for-two-months-if-they-buy-a-new-car-in-april.md>)
- [Why It’s a Great Time to Buy Used Luxury Cars](<https://www.thedrive.com/news/15999/why-its-a-great-time-to-buy-used-luxury-cars.md>)
- [Jersey City Is the Best Place To Buy a Used Car, El Paso Ranks Last: Study](<https://www.thedrive.com/news/jersey-city-is-the-best-place-to-buy-a-used-car-el-paso-ranks-last-study.md>)