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 financed 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.