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You are purchasing secured quality used automobile notes, that is, a loan extended to an automobile buyer.
These notes are secured by the car that is sold. If a note is not being paid and becomes delinquent, we replace it with a good, paying car note.
25% of the notes we own are held in reserve to replace all default notes.
Simple Interest Receivables
The motor vehicle installment loan agreements or motor vehicle retail installment sale contracts will be secured by used automobiles.
These retail installment sale contracts are sold to you and you actually own them.
Each installment contracts provide for simple interest receivables. These are receivables that provide for the amortization of the amount financed under them over a series of fixed level monthly payments.
Each monthly payment consists of an installment of interest that is calculated on the basis of the outstanding principal balance of the receivable multiplied by the stated contract interest rate under the related Receivable and further multiplied by the period elapsed, as a fraction of a calendar year, since the preceding payment of interest was made.
As payments are received under a Simple Interest Receivable, the amount received generally is applied first to interest accrued to the date of payment and the balance is applied to reduce the unpaid principal balance. Accordingly, if an obligor pays a fixed monthly installment before its scheduled due date, the portion of the payment allocable to interest for the period since the preceding payment was made will be less than it would have been had the payment been made as scheduled, and the portion of the payment applied to reduce the unpaid principal balance will be correspondingly greater.
Conversely, if an obligor pays a fixed monthly installment after its scheduled due date, the portion of the payment allocable to interest for the period since the preceding payment was made will be greater than it would have been had the payment been made as scheduled, and the portion of the payment applied to reduce the unpaid principal balance will be correspondingly less. In either case, the obligor is obligated to pay a fixed monthly installment until the final scheduled payment date, at which time the amount of the final installment may be increased or decreased as necessary to repay the then outstanding principal balance.
Financed Vehicles
The extension of credit to an obligor on a Receivable is based on an
assessment of an applicant's ability to repay the amounts due on the
Receivable and the adequacy of the related Financed Vehicle. Additionally,
the extension of credit may exceed the value of the vehicle. The maximum
age of any used motor vehicle acceptable as collateral generally is ten
model years.
Notes Purchased
You are purchasing a note. If the note becomes delinquent a performing note will be substituted. Although we believe we have a more than sufficient reserve, and generate notes daily, the reserve could become depleted if there were a catastrophic economic collapse.
Standard General Risk Statement
As do all forms of investments, this note purchase has risks.
The purpose of this "Risk Statement" is to ensure that potential purchasers
understand that there are risks involved.
Not every type of investment is appropriate for every investor.
Each investor must analyze his/her goals and the appropriateness of this type of investment. It is not appropriate for any investor to invest a large portion
of his/her assets in any single investment.
You will own the notes secured by quality used motor vehicles, in the unlikely event that the company's business fails, you would be able to collect your payments directly from the purchaser of the vehicle as you own his or her car note.
The information contained herein, the various options and details of the Terms, and all other information presented here is subject to change or correction at any time.
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