Lux Investing

Why do dealers want to know the loan value of a car before they invest in it?

I was thinking about becoming an investor in used cars but I was wondering...Why do dealers want to know the loan value of a car before they invest in it? What do they know I dont?

Public Comments

1. thats for finance company . if you are thinking of doing this for a living i suggest you get a job as used car salesman because you can go broke fast in that business
2. They want to know how much money they can potentially make off the car.... Seems pretty straightforward. Before you invest in anything, you want to know what kind of returns you'll see. Looks like you have a long way to go, lol.
3. Because when they sell the car and the buyer needs a loan, possibly with no down payment money, a bank will only lend the loan value, no more. So dealers use the loan value as a guide to auction/purchase prices and for setting asking prices. An "investor" in used cars is called a dealer. You'll need to set up a business, get a business license, get licenced as a dealer in your state, put up bond, have a physical place of business, set up taxes, get insurance, etc.