Buy Here Pay Here Dealers Sell the Same Car – Over and Over,0,5808680.story The practice of selling the same car multiple times is known as “churning.” Buy Here Pay Here dealers can charge interest rates topping 30% and demand large down payments. In some cases, churning can be used to boost profits. Dealers collect large down payments and then repossess quickly when customers default so that the vehicles can be offered for sale again.

The new findings come amid debate in Sacramento over three bills that aim to impose sweeping new regulations on the so-called Buy Here Pay Here industry. One of the pending bills, by Sen. Ted Lieu (D-Torrance), would prohibit Buy Here Pay Here lots from repossessing a car during a 10-day grace period after a payment is due. It also would cap interest rates at 17% plus the federal funds rate (currently at 0.25%). In addition, it would oblige dealers to use a third-party towing service when they take cars back, making repossessions more costly.