How Does In-House Car Finance Work

I’ve heard so many people ask this question “How Does In-house Car Finance Work?” Well it looks like a complicated question but one that has a simple answer which I will be addressing in this article.

Once you begin to ask or hear these questions, then first thing that comes to mind is ‘support or aid in buying a car’. Whoever is asking this question probably needs a car finance and wants an understanding on the subject matter which I will be addressing as stated earlier.


In-house car finance is simply the financial support car buyers get from car dealership where they agree to pay for their car over a specified period of time. With in-house car finance, you pay directly to the car dealership unlike the other forms of car financing where you borrow from a third party lender in order to finance your car.

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Ever heard of “Buy here Pay here”, often abbreviated as BHPH?. Well, that is basically how in-house car finance work. This form of car finance makes it possible for persons with even poor credit history to have access to credit to purchase a car/vehicle from them.


In-house car finance is one great way of buying that new car you so desire. It is quite easy and less complicated to engage in. With in-house car finance, it is the car dealership that is offering you the customer loan to purchase any of their cars.

In-house car finance removes completely the possibility of being denied by a financial institution. The whole idea of in-house car finance came about because car dealerships realized that most buyers take auto loans from financial institutions which are sometimes denied.

However, with the in-house car finance, they get to close more deals themselves which wouldn’t have been possible if a financial institution had denied a customer an auto loan.

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In-house car finance processes are a lot more faster and flexible than traditional financial institutions in that in this case the lender is the car dealership hence no need for any back and forth with a third party lender. Decisions made by the car dealership after reviewing your application is communicated to you immediately. They also try to tailor their rates, down payments or payments to meet your specifications.


The requirements for an in-house car finance is quite simple. They may include;

  • Employed
  • Steady income
  • Down payment
  • US issued ID or passport
  • Proof of residence


Q1. Bank financing vs In-house financing: which is better?

Well, the answer to this question is quite tricky. But if you ask me, I would say bank financing is relatively better than in-house financing for the following reasons;

  • Interest rates for bank financing is comparatively lower than in-house financing
  • In- house financing usually have shorter loan duration as compared to bank financing. This means that you will pay more in monthly installments which can stress your finances for the period.

NB; both methods of financing is good. However if you wish to go for a loan that offers lower monthly payment amounts, then what you need is a Bank loan. Also, the processes one must go through to secure in-house financing is comparatively less stressful as the borrower deals directly with the dealerships.

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Q2. Can in-house finance affect your credit?

Yes!! An in-house finance can affect your credit score but positively if you do your in-house financing from a bad credit car dealership such as AutoMax.

Q3. Do I own my car if it’s on finance?

Firstly, you get to drive your car even if it’s on finance as long as you can pay off the loan. However, when it comes to ownership, it depends.

A vehicle/ car title is what legally shows who the owner of the car is and depending on the State you dwell in and the financing type, either of you can have the title.

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