Texas Buy Here Pay Here Laws: Your Rights as a Buyer
Quick answer: Texas buy-here-pay-here dealers need a dealer license (a General Distinguishing Number from TxDMV) to sell you the car and a motor vehicle sales finance license from the Office of Consumer Credit Commissioner (OCCC) to finance it under Finance Code Chapter 348. Texas caps the rate on dealer-written contracts — for the oldest used cars, roughly 25–27% APR. Your contract must be written, complete, and itemized before you sign. Money problems go to the OCCC; license and title problems go to TxDMV.
Recommended · Temu
6x4 Ft Brown Outdoor Storage Shed with Lockable Double Doors
Just bought the car? Clear the garage so it actually fits. This weatherproof steel shed has lockable double doors — and no monthly storage-unit bill.
$137.21 on Temu
See the shed on TemuAffiliate link: if you buy, this site may earn a commission at no extra cost to you. Price checked September 2026; Temu prices change often.
Here is the blunt truth nobody at the lot will volunteer: a buy-here-pay-here dealer in Texas is not operating in a lawless corner of the car business. The lot is your lender, and Texas law treats that role seriously — rate ceilings, a contract that must be complete before you sign, and a state agency to complain to when the numbers do not match the paper.
That does not make every BHPH deal good. It means you have more protection than the salesman wants you to think — if you know where it lives before you sign.
Who is allowed to sell and finance your car in Texas?
Two licenses cover two different jobs, and a BHPH lot needs both.
Selling takes a dealer license. Anyone in the business of selling vehicles in Texas needs a General Distinguishing Number — the GDN — issued by the Texas Department of Motor Vehicles (TxDMV) for each location.
Financing takes a second license. The GDN lets a dealer sell, not finance. The OCCC licenses motor vehicle sales finance, and both the seller and any later holder of a retail installment contract need that license — including a BHPH dealer who keeps your contract at the lot. If the lot writes the contract and collects your payments, Chapter 348 of the Texas Finance Code is the law of your deal.
A licensed dealer can be examined, fined, and complained about; an unlicensed curb seller cannot. If you cannot find the lot's licenses, that is your answer about the lot. See how the model works in Houston and Dallas before visiting a lot.
Does Texas cap the interest rate a BHPH dealer can charge?
Yes. Anyone who tells you Texas has no rate cap on these contracts is wrong.
Finance Code Section 348.104 sets the maximum finance charge as an "add-on" rate — dollars per $100 per year — based on the vehicle's age:
- New vehicle: $7.50 per $100 per year
- Used, up to two model years old: $10 per $100 per year
- Used, up to four model years old: $12.50 per $100 per year
- Older used vehicles — where most BHPH cars fall: $15 per $100 per year
Add-on rates are not APRs, and a dealer may not quote them as if they were. The OCCC's Current Motor Vehicle Rate Chart converts them: for the oldest class, the $15 add-on is about 26.6% APR at 12 months, 26.75% at 18 months, and 24.7% at 60 months — roughly 25–27% APR by term. Section 348.105 also allows an alternative flat 18% rate instead.
High is not unlimited. If your APR sits above the ceiling for your car's age and term, do not sign. Make the dealer show the math, and call the OCCC if it does not work.
Recommended · Temu
21V Cordless Drill Kit — Full Tool Set in a Case
Every repair you do yourself is a payment you don't finance. This 21V drill kit comes with the bits and hand tools to start — brakes, batteries, and the small stuff. 4.7 stars, 49K+ sold.
$12.69 on Temu
See the drill kit on TemuAffiliate link: if you buy, this site may earn a commission at no extra cost to you. Price checked September 2026; Temu prices change often.
What has to be in the contract before you sign?
Under Section 348.101, a retail installment contract must be in writing, dated, signed by buyer and seller, and completed as to all essential provisions before you sign it. Never sign one with blanks. Under Section 348.102, it must contain the names of buyer and seller, the seller's place of business, your address, a description of the vehicle, the cash price, your down payment — split between cash and trade-in — and each itemized charge. Itemized charges under Section 348.005 are amounts outside the cash price: title, registration and license fees, taxes, lawful sale and inspection fees, and authorized charges for things like insurance or a service contract.
On top of the Texas list sits the federal Truth in Lending box. Judge the deal by these four numbers, not by the weekly payment:
- APR — the cost of credit as a yearly rate
- Finance charge — the dollar cost of borrowing if you pay on time
- Amount financed — what you are actually borrowing
- Total of payments — everything you will have paid when the contract ends
Section 341.502 adds that these contracts must be written in plain language the average consumer can understand, in readable type. If you cannot understand a clause, the law expects better of the contract, not of you. Run the list in dealer traps before your pen touches paper.
What if you negotiated the deal in Spanish?
Then Texas gives you a specific written protection, and it applies to any buyer who negotiates in Spanish.
Under Finance Code Section 341.502(a-1), if the terms of a Chapter 348 agreement were negotiated in Spanish, the dealer must give you a summary of those terms and other pertinent information in Spanish, in a form identical to the disclosures required for a closed-end transaction under federal Regulation Z (12 C.F.R. Section 226.18) — the core numbers: rate, finance charge, amount financed, payment schedule.
Note what the law requires: a Spanish-language summary of the key terms, not necessarily a full translation of every page. Even with the summary, bring someone you trust to go through the full contract before signing. If you negotiated in Spanish and got no Spanish summary at all, that is a real complaint.
Recommended · Temu
20,000mAh Solar Power Bank — Charges in the Sun
Your phone is your job — the lender's call, the gig app, the map. This 20,000mAh bank tops up from the sun and keeps your phone alive all shift. 4.7 stars.
$4.98 on Temu
See the power bank on TemuAffiliate link: if you buy, this site may earn a commission at no extra cost to you. Price checked September 2026; Temu prices change often.
Can a dealer sell you a car "as is" and say anything to sell it?
No. Two different laws get blurred on purpose at bad lots, so separate them.
Texas Business and Commerce Code Section 2.316 allows a seller to exclude implied warranties with words like "as is" or "with all faults." On a true as-is sale, the dealer is generally not promising to fix what breaks later. The FTC Buyers Guide in the window states whether the car comes with a warranty or is sold as-is — read it.
But "as is" is not a license to lie. The Texas Deceptive Trade Practices Act — the DTPA, Chapter 17 of the Business and Commerce Code — makes false, misleading, or deceptive acts in a sale illegal, and an as-is clause does not waive your DTPA rights. Hiding a salvage title or known flood damage, or misrepresenting the car's condition, can still violate the DTPA on an as-is car. The dealer need not fix a car sold honestly as-is. It was never allowed to deceive you into buying it.
Who handles your title and registration?
The dealer does, on a deadline. After a sale, the dealer must file the title transfer, registration, and sales tax paperwork with the county tax office: 20 business days for cash and third-party financed sales — and 45 calendar days for in-house financed sales, which is exactly what a BHPH sale is. The dealer also collects the 6.25% Texas motor vehicle sales tax. If weeks pass with no paperwork and only excuses, that delay is a TxDMV complaint.
Where do you complain when something goes wrong?
Match the complaint to the job that failed:
- The money — OCCC. A rate over the ceiling, charges that do not match the contract, undisclosed fees, or contract and repossession problems with the dealer who financed you: file with the Office of Consumer Credit Commissioner at occc.texas.gov, call the consumer helpline at 800-538-1579, or email [email protected]. That helpline number is also printed on regulated contracts.
- The license, title, or advertising — TxDMV. An unlicensed lot, title paperwork never filed, or deceptive dealership advertising goes to the Texas Department of Motor Vehicles.
- Deception — Texas Attorney General. Fraud and deceptive trade practices can also go to the Attorney General's Consumer Protection division (800-621-0508).
Keep your contract, every receipt, and every text from the lot. Paper wins these fights.
Recommended · Temu
2-Pack 3-Head Solar Security Lights (3000LM, Motion Sensor)
Texas lots finance half the state — and most of those cars park outside. This 2-pack of solar security lights (3000LM, motion sensor) keeps it lit and watched overnight — no wiring, no electrician, no monthly cost.
$22.26 on Temu
See the solar lights on TemuAffiliate link: if you buy, this site may earn a commission at no extra cost to you. Price checked September 2026; Temu prices change often.
Recommended · Temu
V519 OBD2 Scanner — Check Engine Code Reader
Before you sign for that used car, plug this in under the dash and read the codes yourself. It shows check-engine codes and live data — the stuff a seller hopes you never check. 4.6 stars, 28K+ sold on Temu.
$17.01 on Temu
See the scanner on TemuAffiliate link: if you buy, this site may earn a commission at no extra cost to you. Price checked September 2026; Temu prices change often.
Frequently asked questions
Is buy here pay here legal in Texas?
Yes, when the dealer is licensed both ways: a TxDMV General Distinguishing Number to sell and an OCCC motor vehicle sales finance license to hold retail installment contracts under Chapter 348. Ask to see both if a lot feels off.
What is the highest APR a Texas BHPH dealer can charge?
It depends on the car's age and term. Under Section 348.104, the oldest used-car class allows a $15-per-$100-per-year add-on, which the OCCC chart converts to roughly 25–27% APR. Above that is a red flag for the OCCC.
Can a Texas dealer charge me whatever fees it wants?
No. Fees outside the cash price must appear as itemized charges under Sections 348.102 and 348.005. A fee not in the paper you signed is a fee to question in writing before paying it.
Does Texas have a cooling-off period to return a BHPH car?
No general right to cancel a completed purchase because you changed your mind. Your protection is before signing: a complete contract, the Buyers Guide, and the disclosures on this page. Deception is a different claim — raise it promptly with the OCCC, the Attorney General, or a consumer attorney.
Who regulates buy here pay here dealers in Texas?
Both TxDMV and the OCCC. TxDMV licenses the dealership and handles title and registration. The OCCC licenses and examines the financing side — rates, charges, and Chapter 348 contract compliance.
<!-- sources: Texas Finance Code §348.104 (add-on ceilings $7.50/$10/$12.50/$15 per $100/yr) and §348.105 (alternative 18% rate) via Texas Legislature / Justia; OCCC Current Motor Vehicle Rate Chart, effective Jan 1–Dec 31, 2026 (occc.texas.gov) — Class 4 $15 add-on = 26.62% APR at 12 mo, 26.75% at 18 mo, 24.68% at 60 mo. Texas Finance Code §341.502(a) plain language and §341.502(a-1) Spanish-negotiation summary in Reg Z disclosure form (12 CFR 226.18) via capitol.texas.gov bill text and statute text; OCCC Plain Language Initiative (occc.texas.gov), model contracts at 7 TAC ch. 84 subch. H. Texas Finance Code §§348.101, 348.102, 348.005 via Justia Chapter 348 text. TxDMV Starting Your New Dealership (txdmv.gov) — title/registration filing 20 business days cash/third-party, 45 calendar days in-house financed; TxDMV guidance pointing financing dealers to OCCC. OCCC licensing of motor vehicle sales finance sellers/holders including BHPH via occc.texas.gov. Texas Business & Commerce Code §2.316 (as-is exclusion of implied warranties) and DTPA ch. 17 (deceptive acts; as-is does not bar DTPA misrepresentation claim) via Texas AG / State Law Library summaries, TexasLawHelp, TIADA analysis. FTC Used Car Rule Buyers Guide via FTC summaries. OCCC Consumer FAQs / Complaint Portal (occc.texas.gov) — helpline 800-538-1579, [email protected]; AG Consumer Protection helpline 800-621-0508 as listed in OCCC FAQs. Texas Comptroller motor vehicle sales tax 6.25%. CUT: claim of a Texas rule requiring full Spanish translation of the entire contract — §341.502(a-1) requires a Spanish summary in Reg Z form; article states exactly that. CUT: "Texas has no rate cap" — contradicted by §348.104 / OCCC chart. -->