If you’ve tried applying with traditional auto lenders and haven’t had any luck, it may be time to check out a tote the note dealership. These dealers work with borrowers who have less than perfect credit.
What Is a Tote the Note Dealer?
A tote the note dealer, sometimes called a buy here pay here (BHPH) used car lot, are locations that utilize in-house financing. In-house financing dealerships don’t rely on third-party lenders, since the dealer is also the lender.
Because you go through them in all aspects, tote the note dealerships usually offer no credit check car loans. While they skip the credit check, they’re concerned about your income and require down payment.
This means bringing in your most recent computer-generated check stub to prove you have a qualifying income. As far as the down payment required, it often depends on the price of the car you choose to finance.
For borrowers with lower credit scores, or those in unique credit situations, in-house financing at a tote the note dealership could be the next step in getting back on the road.
Reasons to Consider a Tote the Note Dealership
There are quite a few scenarios when seeking a tote the note dealer may be for you. We’ve gathered a list of situations that many borrowers find themselves in that can be a reason for an auto loan denial from a traditional lender:
1) Low Credit Score
Many traditional lenders don’t consider borrowers with credit scores below the “good” range (usually considered a credit score above 660). Your credit score is a large determiner of a car loan approval, and it even influences your interest rate.
However, since tote the note dealerships don’t usually check your credit reports and won’t see your credit score, it may be the break you need to get into a vehicle.
2) Recent Bankruptcy
A borrower who was recently discharged from bankruptcy may run into trouble getting approved by a traditional auto lender. Even though your finances are in better shape after the bankruptcy is completed, it can wreck your credit score.
Again, since a tote the note dealer probably won’t check your credit, your bankruptcy discharged (or even your multiple bankruptcies) isn’t going to be an issue.
3) Vehicle Repossessions
A recent repossession can be a red flag to a traditional car lender. A vehicle that was repossessed usually means you’ve defaulted on an auto loan previously, and most lenders may not be willing to approve you for another one. A tote the note dealership probably won’t check your credit, so a recent repossession may not even be a factor when you apply for financing.
4) Need a Vehicle Quickly
A borrower who needs a car immediately and doesn’t have time to run back and forth between a bank and dealer could seek out a tote the note dealership. If you come prepared with your check stubs, a down payment, and all your identification, you may be able to get in and out of one of these dealers rather quickly.
Finding a Bad Credit Car Dealer
Locating a dealership with in-house financing or lending options for your bad credit situation could mean driving around town and wasting time. But you don’t have to start looking for a bad credit auto loan alone! Along with tote the note dealers, there’s also subprime financing, which is designed to help borrowers who have less than perfect credit.
Begin the search for your next car loan with us at The Car Connection. We have a nationwide network of dealerships that work with bad credit borrowers, and we match borrowers to those with the lending options they need for their situation. If you want to skip the hassle of driving all over looking for a dealer, start here by filling out our free auto loan request form, and we’ll get right to work for you!