What Is a Tote the Note Dealership?

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Megan Foukes is a recent graduate from Indiana University who graduated with a bachelor’s in journalism. Megan works as a content writer for Auto Credit Express and contributes to several automotive and finance blogs.

, - December 5, 2019

Tote the note is another term for a buy here pay here dealership. This type of dealer offers in-house financing, and is able to both sell vehicles on their lot and offer loans for them. This makes the car buying process faster and easier. If you aren’t sure if a tote the note dealership is right for you, we’ll explain the pros and cons to help you decide.

Pros and Cons of Tote the Note Dealers

Tote the note car lots offer financing to consumers that have bad credit or no credit. They’re able to do this by basing approvals on borrowers’ income, not their credit. Many of tote the note dealers don't even check your credit, which is the biggest benefit to taking out a loan with them.

While it’s generally easier to get approved for an auto loan through a tote the note dealership, there are some important drawbacks you need to be aware of, including:

  1. May not be able to improve credit – No credit check means they may not report loans or timely payments to the credit bureaus. This would mean you don’t get the chance to improve your credit score with one of these car loans.
  2. High interest rates – Working with a tote the note dealership usually means your interest rate is going to be higher than average. It’s not uncommon to get approved at a rate that’s in the double digits.
  3. Limited vehicle inventory – Tote the note dealers only sell used cars, which means you aren’t going to find something brand new to finance on the lot.
  4. Pay schedule – Your payments may be due on a weekly or bi-weekly basis, depending on when you get paid. This may not be much of an issue for some, but it could get in the way of budgeting if you have to pay multiple times a month.
  5. Down payment – Tote the note dealerships usually require a down payment. The amount of money down you need is typically based on the cost of the vehicle you choose to finance, so it can vary.

How Subprime Lenders Are Different

Tote the note dealers are just one option for you to consider when it comes to bad credit auto financing. In fact, if improving your credit score is a priority, you may want to work with a subprime lender instead.

Subprime lenders work through special finance dealerships, and know how to handle various credit situations – including consumers with no credit. Although they check your credit, they consider outside factors when extending approvals, such as income and residence and job stability.

Something you may be asked to do if you don’t have credit is provide a cosigner. A cosigner is someone who signs the loan with you and lets you “borrow” their good credit. A potential cosigner can be anyone you know and trust, but they also must qualify for the car loan in order to be eligible. This means meeting the minimum income, debt to income, and credit requirements, which vary by lender.

The Bottom Line

Tote the note dealers are a valid option for anyone with bad credit or no credit who needs an auto loan. Be aware, though, that you may also have the option to finance through a subprime lender.

At CarsDirect, we want to help you find a local dealership. We work with a nationwide network of dealers that have the lending resources to handle unique credit situations. Our process is simple, free, and fast – just fill out our car loan request form to get started right now.


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Megan Foukes is a recent graduate from Indiana University who graduated with a bachelor’s in journalism. Megan works as a content writer for Auto Credit Express and contributes to several automotive and finance blogs.

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