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Automobile notes are promissory notes signed by owners of automobiles, promising to make specified payments to the holder over a specified period of time. Repayment is secured or collateralized by a lien against the title to the automobile. A Portfolio is a whole group or pool of similar automobile notes.
- Tired of sending in credit apps only to get turned down or get low quotes?
- Frustrated at the time it takes to get a quote while the customer waits?
- Hate the lenders matrix and paperwork?
- Chuck it all!
Do this instead. If the customer has a job and can make the payments, sell them the automobile. Keep the loan in house for 90 days. Pool 20 loans or more every month and sell those automobile notes to us. We’ll pay between $.60 and $.85 cents on the (net) dollar or more for your automobile notes!
- We do NOT pull credit on the customer.
- We do NOT verify customer job status or history.
- Our only considerations are:
- The value of the automobile vs. the loan balance
- The loan balance
- The remaining term of the loan
- The pay history
- To maximize your pay price, do the following:
- Keep the gross balance under $6,000; lower balances yield higher cents/dollar prices.
- Keep the term less than 30 months; lower terms yield higher pay prices.
- Make sure the NADA left side trade in value of the vehicle, including adds and deducts for mileage is at least 45% of the gross balance, higher averages yield higher prices.
- Keep track of your records on a spreadsheet in our approved format.
Let’s look at the math. Consider an average purchase. On average, the automobile was purchased for $3,000 and sold for $6,000 with $1,000 down, $5,000 financed at 25% over 24 months with a payment of $266.86 per month. After 3 monthly payments to the dealer, the net balance on the loan is $4501.69, which is sold for $.75/$ or $3,376.27. Multiply this times the number of automobiles in the pool. The dealer’s Nominal Annual Return is over 190% and the Effective Annual Return over 484%!
You can repeat this every month. There is no maximum on pool size. In fact, a larger pool gets better cents-on-the-dollar pricing. Any automobile notes / loans that are not bought in a particular month can be resubmitted the next month.
Are you considering "selling" to a company with Reserve and Recourse? If the company has Reserve and Recourse, are you really selling anything? No. They are advancing you money against your receivables. It’s called a loan. If you would rather borrow against your receivables, you would do much better pledging them at your local bank. The rates will be much better. But, if you want to sell your receivables, consider the following:
- We pay the same or more than our competitors do and we pay it all up front.
- We actually buy your automobile notes / loans and the RISK that goes with them.
- You will never get a Demand Notice from us for late or defaulted loans like you will from you-know-who.
- You are not selling your pool; you are actually getting a loan.
- Most dealers are responsible for the full, complete and timely payment for every one of your customers for the life of every loan. This responsibility could last 2 or 3 years.
- Your reserve will be docked for every late payment and every default.
- You will receive Demand Notices to pay if your reserve has been used up.
- You are taking a huge risk on the gamble that you will get a small portion of your reserve.
- What is their incentive to make vigorous collections if you are on the hook?
- You have an excellent chance of getting a Demand Notice for payment that might be $10,000 or $20,000 or $100,000: how big is the pool? It’s called RISK.
- If your reserve is 20%, even they will tell you that you they will "burn" at least half of it. If they tell you half, how much do you think you are really going to "burn?"
- They are not buying your loans; they are selling you money with no risk to them.
- Sell to them and you are gambling that you can beat the house at its own game.
If you are an automobile dealer and need to liquidate some automobile notes / loans or just need some cash, Call us at 561.735.0885 or Click Here to submit your Automobile Note Portfolio. Any and all information you submit will be held in strict confidence.
We look forward to working with you!
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