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When individuals purchase a new or used automobile, the financing for which they qualify depends on their credit rating. Individuals who fall into the A credit tier (meaning they have good credit) can obtain financing through banks, credit unions, or the autmobile manufacturer's financing division at the most favorable interest rates. The resulting 'prime' loans are either held by the lender through maturity or securitized on Wall Street.

Individuals who fall into the B through D credit tiers typically do not qualify for prime loans. These 'sub-prime' customers must obtain financing through automobile dealers, private investors, or specialized finance companies.

The resulting note from this type of auto purchase is called an automobile note. It is secured by the title of the vehicle. A portfolio of many automobile notes is called automobile paper or car paper.

Benefits of Selling Car Paper

Selling off auto loan portfolios can be beneficial because:

• It provides immediate cash without bank financing, which the dealer can use to purchase more inventory or open another location.

• The dealer no longer has the risk of non-payment from credit customers.

• Placing auto loans with a funding source at point-of-sale allows the dealer to offer better credit terms to customers without securing a bank line of credit.

Murcor Funding represents multiple institutional funding sources that work with dealers to arrange point-of-sale funding. This allows the dealer to offer financing to its customer without having to secure its own bank lines of credit.

Contact Murcor today to find out more about selling your automobile note portfolios.

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