By Amir Dabiri - July 2, 2014
In a Buy Here Pay Here Dealership a collateral exchange is a transaction that takes place quite often. A collateral exchange refers to one vehicle being substituted for another vehicle for a customer. In most states, this agreement does not change any other aspect of the original Retail Installment Contract. Also, any payment history on the previous vehicle remains the same. It is simply a ‘swap’ in vehicles, or ‘collateral’.
So what kind of scenario would generate a collateral exchange? As a dealer, you will always have your problem cars that customers will continue to bring back after the sale due to mechanical errors. At some point in time, it may be better for you to switch out that collateral for the customer. Not only does this save you the hassle, but it could also save you money in the long run. A collateral exchange is just one of many types of transactions that a BHPH dealer may be faced with. It is important to be sure that your Dealer Management Software is able to handle these arrangements. Should you have any questions on how Deal Pack Pro processes a collateral exchange, call our Support Team @ 800-526-5832.
ABCoA is a Software-as-a-Service company dedicated to the subprime industry. Our cloud-native ecosystem handles every part of business operations - improving productivity, security and accuracy, while consolidating vendors and reducing costs.
Since 1983, ABCoA has helped buy here pay here used car dealerships and subprime finance companies eliminate duplication, remain compliant, and achieve success with complete, customer-driven software and dependable support. Customers properly using Deal Pack have never lost an IRS audit.
Recently awarded Top Online Accounting Software for Deal Pack, ABCoA continuously elevates the standard for software in the subprime industry and helps customers grow through our commitment to quality, innovation, and service. Headquartered in Jacksonville, Florida with employees across four states, we remain family-owned and operated.
To learn more about ABCoA, visit www.abcoa.com.
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