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Auto Dealers are Telling Lenders:

21-Feb-2013

Provide Consumers & Dealers with a “Residual Based Financing” Option to Lower Monthly Payments & Sell More Vehicles.
The monthly payment is EVERYTHING for your customers. With the Residual Based Financing program you can now offer your customers an affordable option with a low monthly payment.
Below are five (4) current, realistic examples/estimates of makes & models for January and how CAF can help you provide lower payments for your customers, and help you move more pre-owned vehicles this month. Prices listed below are wholesale + $2500 for illustration.

ALG Residual Book Period JAN – FEB 2013;

1) 2012 BMW 4 Door Sedan 328i $37,500:
With Residual Based Financing: $494 36 month
Conventional Loan: 48 mo.$775/ 60 mo. $629/ 72 mo. $532

2) 2012 BMW X3 28i SUV $38,000:
With Residual Based Financing: $591 36 mo.
Conventional Loan: 48 mo. $544/60 mo. $786/72 mo. 638

3) 2012 Chevy Impala 4 Door Sedan LT V6 $16,200:
With Residual Based Financing: $206 36 mo.
Conventional Loan: 48 mo. $303/60 mo. $246/72 mo. $208

4) 2012 Chrysler 200 4cyl 4 Door Sedan Touring $15,700:
With Residual Based Financing: $189 36 mo.
Conventional Loan: 48 mo. $292/60 mo. $237/72 mo. $201

Residual Based Financing is an end of loan term pay off payment program. It is a fully insured walk-away balloon payment program. On a 36 month “walk-away” balloon, the buyer makes 35 payments and when the balloon payment is due the buyer can pay off the balloon through a trade-in, private sale, refinance or simply “walk-away.” The customer can also pay off the loan anytime during the term of the loan with no prepayment penalty.

Imagine what this can do to increase your auto sales. If you don't have a Residual Based Financing program for your non-franchise or higher end units you may be missing out on a new and interesting financing tool that can increase your sales and profits.

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