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Drive Time Prices

by Gabriel
(Concord, NC )

I went to Drive Time with my wife and checked a couple cars, she has bad credit so we have to go to a buy here pay here dealership which is fine. We took a 2005 Ford Taurus for a test drive and all was well with the vehicle.

After some number crunching they determined that she needed $1,200 down payment also not a problem. I told her we need to weigh our options and I have been researching what cars are worth in there present condition.

To my surprise the car we test drove is in the Kelly Blue Book at $8,500 but they want $15,000 for the car. I am at a loss as to how Drive Time is helping my wife by trying to charge double what the car is worth. Someone please help explain this to me.

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Drive Time Prices

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Good Question
by: Justin
(Editor in Chief)

Hi Gabriel,

Thanks for sharing. Unfortunately, with most buy here pay here (BHPH) dealers you'll find that the pricing is usually going to be more than the Kelley Blue Book Retail value.

Most BHPH dealers will have substantial mark ups and use 1 1/2 to 2 times their cost in the vehicle as a sale price.

One reason they may have a sale price so much higher than Kelley Blue Book is that they may have owned this vehicle for quite awhile and the Blue Book value has dropped substantially.

Back when they first purchased the car it may have had a $12,500 retail value and has now depreciated sitting on their lot. Unlikely they've owned it long enough for it to drop that much, but it could be the case.

The other reason Buy Here Pay Here dealers mark their cars up so much is do to the high risk they assume. Most BHPH dealers will have anywhere from a 15-25% repo rate (sometimes even higher) and those that do pay essentially make up for those that don't.

May not seem too fair, but it is the way it is. A buy here pay here dealer is simply a stepping stone and a way to get a car now while rebuilding you or your wife's credit for future purchases.

If you pay on this vehicle well, then a future loan with a more traditional lender will be easier to come by.

Definitely shop around and see what other options there may be out there for you, or even look at different vehicles on Drive Times lot.

It may be as I mentioned earlier and that is just an overpriced vehicle where others might be more in line with the Blue Book value.

Hope this helps,
Justin

Drive time is a ripoff
by: Anonymous

Justin your comments are not accurate. Drive time is not BHPH as payments are reported on an individual's credit reports versus BHPH loans are not. The main reason for the price difference is not how long the vehicles have been in inventory. It is because they add over $4000 in back end charges such as warranty, oil changes, towing(what moron would pay finance charges on an oil change fee>). Also the prices are inflated and their customers will be buried in these vehicles with no way to trade or sell.

Definition of BHPH NEW
by: Justin
(Editor in Chief)

Hi anonymous,

The definition of Buy Here Pay Here is exactly that. You buy here and you pay here. There are many buy here pay here dealers that report to the credit bureaus each month and whether they do or not they are still a buy here pay here.

Regarding vehicle prices...I believe I addressed that above when I said that they will charge you more than you will pay buying from a traditional dealer.

The reason behind it is due to the loss rate. As a business you've got to make a profit and unfortunately for some buyers (those that pay) they have to cover the losses that other buyers create.

As for the $4000 in back end adds, I'm not sure. I've never worked for Drive Time. I can say that I have quite a bit of experience in this business and am quite confident in the definition of buy here pay here and how they operate.

I appreciate your insight and I'm sure others will as well. Thanks for taking the time to share...

Justin

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