Looking for guidance on trading in a car that has a BHPH loan
My partner has a Toyota Corolla that has been quite unreliable and is often having issues. Her parents bought it from a buy here pay here dealership, despite not needing to since they have good credit. They ended up overpaying for the car, and my partner took over the payments when they passed it down to her.
While we were searching for a new vehicle, I discovered that this loan is classified as a buy here pay here. Normally, with standard auto loans from banks, trading in a car is pretty straightforward because the dealership takes care of everything with the bank. However, in this case, I think we might need to fully pay off the $4,000 still owed before proceeding.
I’ve reached out to the buy here pay here dealership, but the responses have been unhelpful. The dealer won’t even provide me with information on how long it takes to obtain the title after the loan is paid off.
Additionally, I’m curious—if we do pay off the loan and the lien is lifted, will we need to wait for the physical title to arrive before we can trade the car in elsewhere?
You’re correct that BHPH loans complicate trade-ins significantly. Most traditional dealerships won’t touch a BHPH trade because these dealers are notoriously difficult to work with on payoffs and title transfers.
Here’s what you’re facing: You’ll likely need to pay off that $4000 first, then wait for the title. BHPH dealers are slow with paperwork - expect 2-4 weeks minimum for title processing after payoff, sometimes longer. They have zero incentive to rush since you’re no longer their customer.
Some larger dealership groups might handle the payoff directly, but they’ll add a hefty markup to your new loan to cover the hassle and risk. You’ll pay more than if you handled it yourself.
Your best move is to get the exact payoff amount in writing from the BHPH dealer, pay it off completely, then wait for the clean title before shopping. Yes, it’s a pain, but trying to coordinate a three-way deal with a BHPH dealer usually ends in delays and frustration.
Once you have that title in hand, you can trade anywhere without complications. The waiting period sucks, but it’s better than getting stuck in financing limbo.