As counterintuitive (or crazy) as the title sounds, it is true.
When you buy a vehicle for inventory, you put out a fair amount of cash, let’s say $3,000. When you sell the vehicle, you receive a down payment of $1,000, for example, on a sales price of $7,000.
The Retail Vehicle Installment Sales Agreement is completed with an amount financed of $6,500 including TTL. With a 21% APR, and a term of 36 months, a monthly payment of $244.89 results.
You would have cash on the street of $2,000 which would clear up in a little over 8 months by collecting payments. In the meantime, you are in a deficit position on the sold vehicle.
If you were to sell that same loan to a buyer through Agora, you could expect a bid of up to 90% of the principal value!
For this example, let’s assume you have received a reasonable bid of 75% of the remaining principal amount.
After two payments have been made, the 75% bid will earn you a $4,676—Giving your car purchase of $3,000 an immediate cash profit of $1,676!
That is a 56% gain (336% annualized rate) after only 2 months following the sale!
You would have also received the down payment of $1,000 and two customer payments for a total of $1,490
With that $6,166 in the bank, you’re ready to purchase 2 additional vehicles, repaint your building, or take a trip to Las Vegas!