Question:

Why don't some new car dealers set up rent-to-own programs on new cars with no credit check as long as ...

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the customer can prove enough income to pay the note. I'm a former car salesman as well as a person that would like a new vehicle, and you wouldn't believe how many people have bad credit but make good money. Seems like their sales would explode, and more people could be made happy. Food for thought? Any car dealers hooked on to Yahoo Answers? If my idea sounds good and you're a car dealer, e-mail me at kevdbrady@yahoo.com with your response and when you're gonna install such a program.

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  1. It does not make any sense for a dealer to do this.  It takes away to much cash flow and the rate of return is not near enough and then you figure in depreciation, this has NO chance for it to ever to make financial sense for a dealer.  The dealer would have to pay sales tax, insurance, license plates, the list of problems goes on.


  2. There's no market for it.  People dumb enough to RTO a new car would never be smart enough to make the money required.

    The rent-to-own bad-credit business model includes charging 3 times what the item is worth, for whatever reason.  I don't know why.  People with bad credit would never pay $60,000 for a new Chevrolet Aveo.

    But, you can easily get them to pay $200 a month for a 1989 Caprice Classic or 1994 Toyota.  Dealers that offer that deal are literally on every street corner.  Multiply the dollar figures in play here by about 10.  How's that look?  You think the "buy here pay here" customer wants a $2000 a month car payment?

  3. The average RTO places do well because they can always come pickup the TV or stereo and throw it in the truck, take it back and rent to the next sucker...sorry, customer.  A car is a whole different thing what needs insurance, plates, registration, and a decent repossession agent to get it back damage free.

    To put it another way, if your credit is bad you aren't going to get a new car by rent to own.

  4. If you're making "good money" and still have poor credit then you obviously can't handle the responsibility of paying your bills on time, which would make such a program difficult to run successfully.

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