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02-15-06, 12:59 PM
#1
bobaftt
selling my car with owner financing
I am going to sell my car and was contemplating doing it with owner financing to squeeze every drop that I can out of the car. Does anyone have any idea how one would structure this note?
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Join Date: Jul 2003
Posts: 7,827
02-15-06, 01:24 PM
#2
A few things to think about. The buyer will not be able to obtain insurance for a car they do not have a title to. You can't turn the title over until it is paid for. You are not a "lending institution" so it would be doubtful that you could issue a temporary title. Thus, any damages to the vehicle would be your problem. What you are doing, in essence, is renting the buyer your car. Someone else may come in here with a viable answer but I think it is a bad idea to try to do this. Good luck.
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02-15-06, 01:53 PM
#3
bobaftt
Lien holder
I was going to place a lien on the title and require my buyer to provide proof of insurance.
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02-15-06, 01:57 PM
#4
bobaftt
you are the 2nd person to say bad idea though so maybe it isnt a great idea. I think I am going to have to lean towards the cash sale instead. I was just trying to squeeze a little extra blood from the turnip
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Join Date: Feb 2001
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FL
02-15-06, 05:46 PM
#5
Just to pile on a little, the new buyer could show you proof of insurance, cancel it the next day, and total the vehicle the day after that. After which you would have a nice vehicle title for your scrapbook.
tg
tg
Measure it with a micrometer; cut it with an ax.
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04-21-06, 06:35 PM
#7
DNT1
You see this all the time in get rich quick schemes money for nothing and the chicks for free. A man has to factor in risk as all the other posters have pointed out. The risk factor in this makes it worth ziltch to me, lay down your get rich scheme and slowly step away from it LOL
Member
Join Date: Apr 2006
Posts: 2
04-27-06, 08:35 PM
#8
Price vs. Terms
I have sold two cars with owner financing. In both cases, I collected 15% & 10% as a down payment and charged 20% & 24% APR respectively. I structured the deal so that I was able to make my initial purchase price through their initial their down payment and 18 monthly payments. However, the term of their loan was 30 months, so I was able to collect a full year's worth of payments as pure profit.
You have to understand that you are doing this to make a profit of 50% more than what you would normally collect by selling for cash.
If the numbers don't make sense then don't do it. But if the numbers are there, and you don't have anything to lose then why not try it. Anyone that tells you its a bad idea are speaking from FEAR and not from FINANCE.
I used a Automotive Loan Servicing company to collect payments for me. On my second deal, they even offered to by my note but they only wanted to give me 70% of the note value. In addition to handling payment, they checked the status of insurance every quarter. But I later learned that you can send a directive to the insurance company to notify you if they ever lapse. Then you have grounds to repossess but it has to in your Retail Finance Agreement.
There are a lot of people that can't get financing for a decent car. You can provide financing for a vehicle and net a good return on your assets.
Best Success!
You have to understand that you are doing this to make a profit of 50% more than what you would normally collect by selling for cash.
If the numbers don't make sense then don't do it. But if the numbers are there, and you don't have anything to lose then why not try it. Anyone that tells you its a bad idea are speaking from FEAR and not from FINANCE.
I used a Automotive Loan Servicing company to collect payments for me. On my second deal, they even offered to by my note but they only wanted to give me 70% of the note value. In addition to handling payment, they checked the status of insurance every quarter. But I later learned that you can send a directive to the insurance company to notify you if they ever lapse. Then you have grounds to repossess but it has to in your Retail Finance Agreement.
There are a lot of people that can't get financing for a decent car. You can provide financing for a vehicle and net a good return on your assets.
Best Success!
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Join Date: Feb 2001
Posts: 11,475
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04-28-06, 04:41 AM
#9
And, of course, you reported the profits to the IRS on your 1040, right?
Measure it with a micrometer; cut it with an ax.
Member
Join Date: Apr 2006
Posts: 2
05-01-06, 06:44 AM
#10
Interest Income - 1099-INT
Anytime you arrange owner financing, then you are earning income that taxable to the IRS. So, obviously it is important to understand that you have to both report and pay taxes on the interest that you've earned.
Although I have a personal accountant, any tax preparation firm can prepare a 1099-INT for you to report the interest portion of the payment that you receive.
By charging the buyer interest, I acted like a finance company so I paid tax on the interest income. It's no different than paying tax on the earnings of a stock dividend.
Although I have a personal accountant, any tax preparation firm can prepare a 1099-INT for you to report the interest portion of the payment that you receive.
By charging the buyer interest, I acted like a finance company so I paid tax on the interest income. It's no different than paying tax on the earnings of a stock dividend.
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Join Date: Feb 2001
Posts: 11,475
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04-15-09, 04:50 AM
#12
Three year old thread, Jay, and these were his only posts.
Measure it with a micrometer; cut it with an ax.
Member
Join Date: May 2009
Posts: 1
05-05-09, 06:01 AM
#13
I live in Atlanta. Any suggestions, on how to sell my Toyota Yarish 2005 in quick time?
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Join Date: Jan 2005
Posts: 3,774
PA
05-05-09, 06:33 AM
#14
Place a classified ad in the newspaper, put it on Ebay Motors, or take it to a dealer.
Adopt a shelter pet!
Spay or neuter your pet!
Please don't leave pets or kids in a hot car!
Bring your pets inside in this cold weather! Have some compassion and sense.
