Tote the Note Dealerships and Bad Credit

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Meghan Carbary has been writing professionally for nearly 20 years. A published journalist in three states, Meghan honed her skills as a feature writer and sports editor. She has now expanded her skill-set into the automotive industry as a content writer for Auto Credit Express, where she contributes to several automotive and auto finance blogs.


, - September 29, 2020

Not all auto lenders are the same, and if you're dealing with bad credit, you may think turning to a tote the note car lot is your only option for an auto loan – it's not. This type of used vehicle lot has a reputation for working with people who have low credit scores. But, the opportunity for a car can come at a price.

What's a Tote the Note Dealer?

A tote the note dealer is another name for a car lot with in-house financing. You may also know this type of dealership as a buy here pay here dealer. No matter what you call it, this type of auto lender does things a bit differently than traditional and subprime lenders.

Tote the note dealerships don't go through an outside source for lending – they’re the lender, as well as the car dealer. This can make things more convenient for borrowers who are looking to get in and out of a dealership quickly, since there's no waiting for approval from a third-party lender.

Car Loan Requirements at a Tote the Note

Tote the note lots only sell used vehicles, and often don't check your credit to get the process started. No matter how low or nonexistent your credit score may be, you could still have a chance for an auto loan approval if you have a valid driver’s license, enough income, and a down payment to get the ball rolling.

Like most car loans for bad credit borrowers, a down payment is a standard requirement. However, tote the note dealers are known to require a larger chunk of change than other types of dealerships – sometimes around 20% of a vehicle's selling price. Consider it the price of getting a car without a credit check.

You're going to need to prove that you earn a steady income. Additionally, tote the note dealers may ask that you make payments more often than other lenders, and sometimes require a payment every week. In the past, it was a common practice for these dealerships to only accept cash payments in person. Now, you're likely to find more payment options available, though some may adhere to the more old school pay-in-person method.

Have You Considered Subprime Lenders?

As a borrower struggling with credit issues, it's important to know that a tote the note dealer isn't your only option for getting an auto loan. There are also subprime lenders that work through special finance dealerships.

These lenders know that there's more to you than a three-digit number, so they look at other factors in addition to your credit score when they're considering your car loan eligibility. Besides looking at your credit reports and score alone, subprime lenders look at your income, employment, residence stability, whether or not you're willing to make a down payment, and more..

For the most part, bad credit car lenders require borrowers to make a down payment of at least $1,000 or 10% of a vehicle's selling price. They also typically require you to have a valid driver's license, proof of a working telephone, and a list of personal references.

You're also likely to qualify for a higher interest rate as a bad credit borrower, though subprime lending rates tend to be slightly lower than those at tote the note lots.

Helping You Take the First Step

If you need to get an auto loan, let us take the hassle out of finding a special finance dealer to work with you. At CarsDirect, we want to match you to a local dealership that's signed up with the subprime lenders you need.

To get on the road toward your next car, simply fill out our easy, fast, and no-obligation auto loan request form and we'll get to work for you!

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Meghan Carbary has been writing professionally for nearly 20 years. A published journalist in three states, Meghan honed her skills as a feature writer and sports editor. She has now expanded her skill-set into the automotive industry as a content writer for Auto Credit Express, where she contributes to several automotive and auto finance blogs.


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