(PCS) Move Affects an Active BHPH Loan
Receiving orders for a Permanent Change of Station (PCS) is a fundamental part of military life, bringing both excitement and a long list of logistical challenges. If you have an active Buy Here Pay Here (BHPH) auto loan, you might be wondering how this major move will impact your financing agreement. Since BHPH loans are managed directly by the dealership, a move across the state or country requires careful planning and clear communication. Unlike a traditional bank loan, your relationship is with a local lender who financed your vehicle. The good news is that a PCS move does not have to complicate your loan. Our dealership has extensive experience working with service members from Fort Bragg and surrounding communities. We understand the unique demands of military life and are prepared to work with you to find a straightforward solution that keeps you on the road and in good standing with your loan as you transition to your new duty station.
Navigating a PCS move while managing a Buy Here Pay Here loan is entirely possible with a proactive approach. The most critical step is to inform us about your new orders as soon as you receive them. This allows us to review your account and discuss the specific terms of your agreement. We can explore options like setting up automatic payments or managing your account online to ensure a seamless transition. Our goal is to support you during your relocation, not to create a hardship. By working together, we can adjust the logistics of your loan management to fit your new circumstances.
Navigating Your Auto Loan Through a Military Relocation
For active-duty military personnel, a Permanent Change of Station is a routine yet significant event. It involves uprooting your life and moving to a new base, which could be hundreds or even thousands of miles away. This process affects every aspect of your personal affairs, including financial agreements like an auto loan. A Buy Here Pay Here loan is different from a traditional bank loan because the dealership that sold you the car is also the lender. This direct relationship is beneficial for many reasons, but it requires special attention during a long-distance move.
The primary concern for the dealership is ensuring the loan remains in good standing and that they can maintain contact with you and know the location of the vehicle securing the loan. For you, the concern is making payments on time, properly registering the vehicle in your new state, and fulfilling all contractual obligations without disruption. Open communication is the bridge that connects these interests and ensures a smooth process for everyone involved.
Your First Step: Contacting Your Lender Immediately
As soon as you have your PCS orders in hand, your first call should be to our financing department. Procrastination can lead to misunderstandings and potential complications. When you contact us, be prepared to provide a few key pieces of information:
- A copy of your official PCS orders.
- Your expected date of departure and arrival.
- Your new physical address and mailing address, if known.
- Updated contact information, including phone number and email.
Providing this information upfront demonstrates responsibility and allows the lender to update your file accordingly. It also opens the door to discussing the best methods for managing your loan from your new location.
Understanding Your Contract and Out-of-State Policies
Before your move, it is wise to revisit your loan agreement. Some BHPH contracts include clauses that specifically address relocation. Pay close attention to any language regarding taking the vehicle out of state permanently. You should understand your responsibilities for notifying the lender, updating insurance, and re-registering the vehicle. You can learn more about what you should read closely in a BHPH contract on our blog. Most agreements will require you to maintain comprehensive and collision insurance on the vehicle, and you must list the dealership as the lienholder on your new policy in your new state. Failure to do so could be considered a breach of your contract.
Managing Payments and Logistics from a Distance
One of the biggest practical changes during a PCS move is how you will make your payments. If you were used to paying in person, you will need a new plan. Fortunately, there are several convenient options:
- Automatic Payments: Setting up an automatic payment or ACH withdrawal is often the easiest solution. This ensures your payments are always on time, protecting your payment history.
- Online Payments: Many dealerships, including ours, offer a secure online portal where you can pay your BHPH loan online from any location with an internet connection.
- Phone Payments: You can typically call the financing department directly to make a payment over the phone using a debit card.
- Mail: While slower, sending a check or money order is also an option. Be sure to mail it well in advance of the due date to account for delivery time.
Beyond payments, you must handle the legal requirements of moving a financed vehicle. You will need to register your car and obtain new license plates in your new state of residence within their specified timeframe. When you do this, the new state's DMV will require the vehicle's title to add the lien. We can work with you and the DMV to ensure this process is handled correctly. You must also provide us with proof of your new registration and updated insurance policy that meets the requirements of your contract.
The Servicemembers Civil Relief Act (SCRA) and Your Loan
The Servicemembers Civil Relief Act (SCRA) provides certain financial and legal protections for active-duty military members. While the SCRA offers important safeguards, such as an interest rate cap of 6% on loans taken out before entering service, it does not erase your obligation to pay. For a loan obtained while you are already on active duty, the primary protections relate to legal proceedings and repossession. The SCRA can prevent a lender from repossessing a vehicle without a court order. However, the goal should always be to maintain good communication and consistent payments to avoid any such scenario. It is a shield for challenging situations, not a substitute for fulfilling your loan agreement.
Alternative Options Before You Move
In some cases, moving with your current vehicle and loan may not be the most practical choice, especially for an overseas PCS. You may want to consider other options:
- Trade-In Your Vehicle: A PCS move can be a perfect time to upgrade or change your vehicle. You can value your trade-in and potentially use any positive equity toward a different vehicle from our used inventory that better suits your new location.
- Sell the Vehicle: You could sell the vehicle privately or back to the dealership to pay off the remaining loan balance. This would free you from the loan entirely, allowing you to purchase a new vehicle upon arrival at your new duty station.
A PCS move is a complex process, but it does not have to disrupt your auto financing. By being proactive, communicative, and understanding your responsibilities, you can ensure a smooth transition for both you and your lender. Our team is committed to supporting our military customers through every stage of their service.
Do I have to tell my BHPH dealer I am moving for a PCS?
Yes, absolutely. Your loan agreement almost certainly requires you to inform your lender of any change in address, especially a permanent move out of state. Notifying them is crucial for maintaining a good relationship and avoiding a potential default on your loan contract.
Can I take my BHPH vehicle out of state for a military move?
In nearly all cases, yes. As long as you are proactive and communicate with the dealership about your PCS orders, they will work with you. You will need to continue making payments, update your registration and insurance in the new state, and keep the dealership listed as the lienholder.
Will a PCS move negatively affect my credit with the BHPH lender?
A PCS move itself will not negatively affect your standing. What matters is how you manage the loan during and after the move. By communicating with the lender and continuing to make your payments on time, your positive payment history will continue, which may be reported to credit bureaus.
What happens if I get stationed overseas with an active BHPH loan?
An overseas assignment presents unique challenges. Shipping a vehicle can be expensive and complex. In this scenario, you should contact your lender immediately to discuss options. These might include selling the vehicle, having a family member take over payments, or another mutually agreeable solution.
Does the Servicemembers Civil Relief Act (SCRA) cancel my car loan?
No, the SCRA does not cancel or forgive loan obligations. It provides protections, such as potentially lowering the interest rate on pre-service loans to 6% and requiring a court order for repossession. You are still responsible for making your payments as agreed upon in your contract.
