BHPH and Tote The Note
What Are Tote The Note Car Loans?
Many bad credit borrowers are using something called tote the note car dealers for their auto financing needs.
When a person has bad credit, he or she is likely to have issues getting financed for a vehicle.
Alternatively, they may not believe they can even qualify for subprime car loans.
However, new tote the note car lots are growing every month, and specifically designed for consumers who have bad credit.
What is tote the note? This is a car dealership that chooses to hold the title of the car while you make installment payments to them.
They take the place of a loan company for people who cannot find financing elsewhere.
The in-house lenders that offer this form of tote the note financing can avoid the use of third-party companies so that they can provide tote-the-note financing from their dealership.
Many people do not have a proper understanding of interest rates, loan amortization and how a tote the note business affects a car loan and the money you will lose in interest.
Tote the Note car dealerships can take advantage of your bad credit when offering you a loan for a car.
To make it easy to understand, tote-the-note is a form of in-house financing, Instead of providing people with financing through a bank or similar option; the car dealership directly finances the loan.
You make the payments for the amount of the sale to the tote the note car lots.
Tote The Note Car Lots
When dealing with tote the note car lots and buy here, pay here car lots with in-house financing dealers, people who have poor credit are much more likely to be able to get financing for used cars.
It is common for these car dealerships to have a sign that says buy here pay here because they fund the buyer.
Just remember, the used car lot industry is littered with predatory companies who take advantage of people with bad credit to sell their cars. Many people use buy here pay here financing lots or a similar financing method.
Tote The Note vs. Traditional Loans
One of the biggest differences between these two types of car dealerships is in the overall shopping experience. Put simply; the experiences are reversed.
When a buyer steps foot onto a traditional car lot, the salesperson will work with the purchaser to find a vehicle that they love.
In most cases, the budget, interest rate, lease terms, and fine details are not handled until after the customer has chosen a vehicle that he or she wants to purchase.
At tote the note companies, the process is entirely reversed.
After entering this type of car dealership, the buyer will be taken to the finance manager before they search used cars.
The finance manager will discuss the amount of money that the buyer can afford every week.
This is used to decide what car the person can afford. After considering all of the details, the customer will be taken to view used cars that he or she can afford.
Many people choose to do business with tote your note car lots because they are almost guaranteed to get a car even though they will pay a higher rate. A person’s credit situation does not matter.
They could have poor credit, bad credit or good credit, and it is almost guaranteed that they will be able to get financing for a vehicle.
Guaranteed loans are a type of specialized financing tote-the-note loans that will require pay stubs or proof of income for.
Tote your note car lots almost always skip the process of a credit check with guaranteed funding. What these dealerships care about is evidence of residency and income.
Since these dealerships provide in-house financing, they are taking a risk with their customers and want to know that their clients are residents and can afford to pay for the vehicle.
Another big difference between the two types of car dealerships is the average interest rate.
A tote-the-note dealership is almost always going to send customers home with a higher interest rate.
They can trap people into high rates. The average interest rate is higher at these car lots because they are taking on more risk than traditional used car dealerships, so they must be compensated for the additional risk.
Tote-the-note dealers do not report to the credit bureaus, and they seldom check the credit of their customers.
Another significant difference between traditional and tote-the-note dealers is the inventory. A tote-the-note dealer is likely to have a much smaller inventory than a traditional dealership.
Also, the vehicles on this type of car lot are likely to be older and have higher mileage than the cars on a typical lot.
The reason tote-the-note dealers have older, high-mileage vehicles is because they can get more money for cars that would otherwise be passed up by a buyer looking for a quality automobile.
They can ask more for something that is worth a bit less and then they can sell cars that would not sell as fast.
The person who owns tote the note car lots has money tied up in these vehicles and must wait for monthly payments.
A traditional dealer does not have such dependence on customers making timely monthly payments, and they are not taking on as much risk, so they can afford to have many new, low-mileage vehicles.
Why Choose Tote-The-Note?
Unfortunately, many consumers have been turned down for a car loan by traditional dealers, and this is an experience that can be very irritating.
It can leave them discouraged, and they may feel helpless especially after losing their car in a total loss accident, and they were not prepared to finance a car.
When going to a tote-the-note dealer, buyers are almost always approved, so they do not have to worry about getting turned down for the car loan.
Cheap pre-owned vehicles, weekly payment options, and guaranteed approval are some of the reasons to work with these car dealerships.
People who have very low credit scores can expect to be approved, and it is even possible for some to get approved after having a recent chapter 13 or 7 bankruptcy.
Consumers do not need to have established credit, and they do not need to have someone co-sign for a loan.
In most cases, tote-the-note dealerships require nothing more than proof of identity, evidence of residency, proof of monthly income and proof of employment.
This necessary information should be enough to get you financed for a vehicle. Although there will likely be many high-mileage cars, it is not uncommon for these dealers to have newer, dependable automobiles.
Tote The Note Disadvantages
Like everything in life, there are some disadvantages to doing business with tote the note car lots.
One disadvantage is the inability to use special financing tote-the-note loans for credit rebuilding.
Since these dealerships do not report to the credit bureaus, they cannot be used to rebuild credit.
The used car market and tot the note dealerships are littered with predatory lenders so proceed with caution.
Tote-the-note car dealerships take on many risks, and to compensate for the additional risk; it is not uncommon for these dealerships to place a GPS unit inside of their vehicles.
The tracking unit makes it possible for the dealership to repossess their car if a buyer stops paying for the vehicle.
Like the GPS unit, this is another common practice, and if an owner stops paying for a car, the dealership can use this device to prevent the vehicle from being driven.
However, it is important to understand that not all dealers use these security devices because it can get costly to install such devices on every vehicle.
One of the biggest downsides to using a tote-the-note dealership is that used car loans from these dealers will almost always be high-interest loans.
However, the increased interest rate is to compensate the dealer for working with consumers who’ve been turned down because of a poor credit score.
What To Do Next
Maybe you’ve experienced some difficult financial situations, and as a result, you have a poor credit score. Perhaps you have no credit history at all or have filed for bankruptcy.
It could be that you need a loan broker like Valley Auto Loans that finds reasonable car loans for low-income families.
Regardless of your situation, you can apply online to get financing for a car. Valley Auto Loans can help you get into a vehicle even with low credit scores.
So what is a good credit score to buy a car or qualify for a car loan with bad credit? Let us help you answer that question. You will be surprised.
The first step in the process is filling out the credit application, which can be found here on our website. By submitting the loan application, you can obtain a pre-approved amount.
Then when you visit the local dealership, you can discuss all of the cars details a lot easier when you know the car loan is already approved.
There is a good chance that you will be able to drive away with a vehicle on the day you visited your local car dealer, regardless if you buy or lease.
You will not have to settle for the cars at a tote the note dealer lot. You can even buy from an individual who is selling a car for a great deal.
If you have been turned down by traditional sellers, you know that it is one of the worst feelings in the world. It makes much more sense to work with a dealership that cares and won’t judge you based on your credit history.
By filling out and submitting the credit application or refinance request on our website, you are on your way to getting approved for a reliable vehicle without a garbage tote the note deal.