Why are buy here pay here cars more expensive?

Because you're not only buying a car — you're buying the financing, and the lot is pricing in the chance it doesn't get paid.

A bank lending to someone with good credit expects nearly everyone to pay. A buy-here-pay-here lot is lending to people banks turned down, and it knows a meaningful share of those loans will end in repossession. The ones that do pay cover the ones that don't. That's built into both the sticker and the interest rate.

There's a real cost on top of that. The lot has to recondition older cars, carry them on its own books rather than a bank's, chase late payments with its own staff, and eat the loss when a car comes back damaged. A franchise dealer does none of that — it hands the loan to a lender and the risk goes with it.

What that means for you is practical rather than philosophical: the price is what it is, but the down payment and the payment schedule are usually more negotiable than the sticker. And because these are independent businesses rather than one chain, the same money goes further at some than others — which is the argument for calling several before you commit to one.