WHAT ARE TOTE THE NOTE AUTO DEALERS?
Nowadays, owning a car is more of a necessity than a want. So it is not surprising to know that a lot of people are in the market to purchase their own cars to make traveling more convenient.
However, not all car buyers have the money to pay the vehicles they like upfront. After all, everyone knows that cars do not come cheap. As a result, they choose to take out a loan to get the funding they require.
Credit unions and community banks often come to mind when it comes to auto financing. The problem with these financial institutions, however, is that they prefer to lend money to those with positive payment history appearing on their credit reports.
Due to this, those with bad credit records get discouraged to approach them for the fear of getting rejected. As such, they feel like they have no other choice but to turn to other risky financing sources, such as tote the note auto dealers.
Who are they?
Simply put, tote the note auto dealers are a type of dealership that handles its own financing. They often cater their services to potential car buyers who either have poor credit or do not want to go through the lengthy process of taking out a loan from traditional lending institutions.
Because they facilitate a “buy here, pay here” operation, the first thing you will notice when dealing with them is that they will ask how much you are capable of spending on a car each week. From there, they will work out the terms and let you pick a vehicle from their lot.
The practice may seem appealing on the surface–the tote the note auto dealers will try to work around your budget, approve you even when you have bad credit, and their processing time does not take too long.
However, know that resorting to this option is one of the worst possible financing decisions you could make. Here are some reasons why:
1) LIMITED CAR OPTIONS. Unlike when you go car shopping at a dealership that works with a third-party financing company, vehicle options available in tote the note auto dealerships are limited.
What you see on the floor are the only ones you can choose from. This, in turn, confines your options to vehicles that you probably won’t be happy driving around.
2) SUBSTANDARD CARS. Believe it or not, most of the cars sold at tote the note dealerships are second-hand or bought from auctions by the dealer. Before they are displayed on the floor, they are cleaned up so they look like new or were only slightly used.
There have also been a couple of cases were some dealerships were involved in the illegal activity of selling wrecked or salvaged vehicles.
The trick is simple: They patch up the vehicle so it looks all prepped up on the outside, then sell it at an expensive price.
The point here is that, there is a possibility you could end up with a “lemon” vehicle when you opt for this kind of financing. When that happens, you are putting yourself at risk of spending more than you are willing to shell out on vehicle repairs, or worse, end up in an accident while driving the car.
3) NO HELP ON YOUR CREDIT. If you are like many uninformed buyers, chances are you assume that when you take out a car loan from a tote the note auto dealer, your credit will improve. Think again.
Many of these dealers won’t take the time to report the payments you make to the major credit bureaus to help improve your credit rating.
However, when you miss out one payment, they will alert the authorities, which in turn will drag your score further. When that happens, you will end up in a cycle of taking out loans from dealerships like this if you need financing, making it more difficult to rebuild your credit rating.
A Word of Advice
It is a sad truth that many car buyers fall victim for the scheme of these tote the note dealers. However, you can protect yourself against them if you exercise due diligence.
Do your research and seek out for legitimate auto lenders. Even if you have bad credit, there are many financing institutions that are willing to work out terms that will suit your situation and will help you improve your credit rating.
You can check out the bad credit financing programs offered here at Prescott Financial.