The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: goldgrasshopper on May 06, 2016, 01:15:17 PM
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So I'm selling an 2003 Acura RSX (w/ 80K miles) on craigslist and nearly half of interested buyers ask me whether I offer financing!? The car is priced fairly, but because its a popular Japanese tuner car, you get alot of interest from younger people who can't quite afford throwing down $6K outright. I've searched the same car on craiglist and dealers tend to price them at a 33% premium.
Is there a way for me to offer financing, perhaps through a third party?
Thanks
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You could easily draw up a contract, get it notarized, and simply receive payments based on an amortization schedule. What interest you charge is up to you, but generally speaking, the buyer is the one who obtains financing.
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I would not do it. To much risk, you cannot vett the buyer like a lender would. The buyer is the one who would need to obtain credit then come to you with the cash.
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Don't! Don't! Don't! Unless you have a friend in the collection business who can handle the repossession/creditors' rights issues, you probably lack the experience/skill set to deal with this if things go sideways. And you're contracting with someone who can't afford $6,000. Don't! Don't! Don't! Not a close call.
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If they cannot obtain financing from a bank, that has a proper system in place for vetting them, and would be less affected by an individual loan default, how is it a good idea for you to do it?
(This from someone that has financed cars for three* different individuals - friends and family - over the years. And I didn't lose a penny, but I still strongly recommend against it. I cannot even begin to imagine doing that with strangers. As a landlord, I use MySmartMove.com to run background/credit checks, and that's just to help ensure I get monthly payments and don't have to kick people out. With a car, once the title is in their name, you're not going to have a lot of recourse.)
(*Actually more like five if you count ex-girlfriends. Don't ask. Actually, I don't care. I have no shame. I'll tell you the stories.)
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You are basically making a loan to a stranger and giving them your car. So, yeah, you could do that but why would you? If the person can't get a loan through some sort of traditional route they are likely a very bad bet for making them a personal loan.
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So I'm selling an 2003 Acura RSX (w/ 80K miles) on craigslist and nearly half of interested buyers ask me whether I offer financing!? The car is priced fairly, but because its a popular Japanese tuner car, you get alot of interest from younger people who can't quite afford throwing down $6K outright. I've searched the same car on craiglist and dealers tend to price them at a 33% premium.
Is there a way for me to offer financing, perhaps through a third party?
Thanks
few very good points in the above posts. I concur too.
so my response would be NO, Please DON'T do it. It's like asking for problems and headaches in your life.
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If they cannot obtain financing from a bank, that has a proper system in place for vetting them, and would be less affected by an individual loan default, how is it a good idea for you to do it?
Yes, my sentiments exactly. I was just wanted to explore whether such a 3rd party option existed, whereby the lender pays my cut in full, then they assume the responsibility with the buyer and collect premium + interest. I might as well turn my car into the dealer at this point..
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If you provided financing for the people buying your car, which I wouldn't like the others, you would need to work out what the collateral is going to be. In most auto loans, the collateral is the car itself so you would hold onto the title until you received full payment. But suppose they wrecked it the next day and walked away from the deal. Your asset used as collateral is not a hunk of scrap metal. Your only option then would to be to go after them and their insurance company in a lawsuit. Not very appealing to me.
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Here is my story. We were getting ready to sell an old econo-box that was not worth much money. I was kind of dreading the hassle. My wife told me of a single mom at her church that was struggling and needed a basic, reliable car. We agreed to sell with a small amount down and monthly payments. She made the first monthly payment and then skipped town. Fortunately we did not lose very much money. I mark it down as a not too expensive lesson learned.
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Sell to one of the other half that are not asking about financing?
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Watch Judge Judy for a week and you'll never ask this question again!
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You know who thinks this is a good idea? The same people who came up with the idea for the "New Coke".
Don't do it. There is a reason these people couldn't get bank financing.
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Yes, my sentiments exactly. I was just wanted to explore whether such a 3rd party option existed, whereby the lender pays my cut in full, then they assume the responsibility with the buyer and collect premium + interest. I might as well turn my car into the dealer at this point..
Yup! The buyer goes to their bank or credit union and gets approved for a used car loan, then comes to you with a check for the agreed on amount from the bank.
If their bank won't give them the money for that, what makes you think they'll give you the money?
Far too many of those arrangements end up as "Zero down, zero a month" payment schedules. Not worth the trouble.
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Haha. No way.
Tell them to go to a bank.
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If you're desperate for cash then go to Carmax - otherwise, hell no.
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Haha, many years ago I sold a car listed at $500, which was probably its fair market value (not SO long ago that it was other than a functioning but simple high-mileage car -- not 1910 ;)!). I would, indeed, get calls from would-be buyers asking me if I needed all the money at once. Well, no. Only if you want the entire car at once. So that's another alternative, I suppose.
(Add me to those saying this is a lousy idea).
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Haha. No way.
Tell them to go to a bank.
Exactly.
I did that once. The car burned up in a parking lot of a bar. (They left the windows down and someone tossed in a lit cigarette.) Never saw the rest of my money.
You won't get paid.