Tote the note financing is very similar to buy-here-pay-here (BHPH). It is a very common way to finance bad credit auto loans. A common advertisements used by a tote the note dealer is ”we are the bank.” Using a tote the note dealer is only a good idea if you have tried every other possible avenue of financing a car. Even then it is not a ”good” idea, it is just the last avenue open to you.
Why Avoid Tote The Note
When you visit a tote the note dealership, you will notice one thing right away: the poor quality of the vehicles available. To begin with, they will be at least eight years old, most likely 10. Next, nearly every one will have in excess of 100,000 miles on them. Many will even show external signs of damage.
Beyond the quality of the vehicle, is the price. Just for the sake of comparison, I did a price comparison. There is a local tote the note, a national chain dealership with offices in 36 states. After searching their inventory online and finding a similar car at another local dealership, I found that the tote the note was asking $8,995 for a car that was listed for $4,995 elsewhere and had a Kelley Blue Book (kbb.com) suggested retail price of just $4,650. So, thinking I may have come across an anomaly, I compared ten cars on the tote the note website with their suggested retail price on kbb.com. Every vehicle was listed at nearly double the suggested retail price.
Lastly, the bad credit auto loans offered by tote the note dealerships are rarely reported to the major credit reporting agencies. That means you will see no credit score benefit from paying one of these loans responsibly. On the other hand, if you default, many of these dealerships will place a negative account onto your credit report.
You Have Options
Your most important option is to request a free copy of your credit report, then working to correct the negative accounts listed. Of course, that will take time. If you need a car now, and want to avoid a tote the note or BHPH dealership, then all you need to do is spend some time online. There are many specialty lenders operating online who will gladly work with nearly any credit score and income level. These lenders report every loan to all of the major credit reporting agencies, do not set the price of the cars, and offer an interest rate that is often lower than you will find at a tote the note dealership. We can help you find just such a dealer or lender. Go here to apply online.