Tulsa daily world. [volume] (Tulsa, Indian Territory [Okla.]) 1905-1919, 1916-03-19
Time PAYMENTS
PROVING POPULAR
Five Makes Of Cars Are
Now Sold on Deferred
Payments.

stallments has now become a stand
ard port of the business Of dealers
selling at least five makes of cars.
Doubtless other makers will be added
to the list from time to time, but the
five so far in line on the proposition
are the Overland, Studebaker. Chal-
mers, Maxwell and Paige, all large
producers, and their announcement
of arrangements on behalf OF their
dealers came out in about the order
named. In every case the car maker
has no financial interest in the credit
company that buys the notes taken in
by the dealers, but the maker has
simply made the proper arrangements
so that the dealer MAY do this class
of Business on proper and logical
basis.
In every case SO far made public an
old and firm banking house Is back of
the ARRANGEMENTS and while the
plans differ considerably in their de-
tails they follow about the same gen.
eral ideas of having one-half to one
third of the price of the car paid
down and the balance in eight month
ly payments. The banking firm then
buys these notes from the dealer.
HENCE the dealer has n ready outlet
for this paper and does not have to
use his local credit for the purpose.
Undoubtedly the installment idea will
increase the sales of cars, for it opens
up that field in which there are many
who have enough to buy a car, but
cannot pay 1t all ont at once.
The Men Behind.
Following are the credit houses
back of the time sales Of the five cars
mentioned:
Overland - Guaranty Securities
company, Toledo, Ohio. Chalmers
AupicnIfnra1 Nhinoun
Studeba ebaker-Commercial Investment
Trust, New York and st. Louis. Max
well-American Commercial com
rany, Cleveland. Paige-Bankers'
Commercial Corporation. New York.
Up to a short time ago It was gen.
orally thought that cars could not be
marketed successfully on the Install
ment plan basis. because ii was be-
lieVed there was too much risk OF
damage and depreciation to the We
hicle between the time of first pay
ment and final payment. However,
the new arrangements seem to over
come this difficulty.
The wider use of cars in the gen.
eral public and the need Of an ade-
quate method of doing such business
as to save the dealer from haphaZard
methods that might lose him much
money. or even wreck his business,
have decided some of the big pro-
ducers Of cars to make arrangements
with banking interests to finance
such transactions. Doubtless the
great earnings of the motor car maxi
ers during the past wear and the con-
stantly increasing market for cars
We're big factors in bringing to the at
tcntion of big banking houses the
matter of financing time sales. just as
these factors have induced many
moreyed interests to invest heavily in
the expanding motor car factories
themselves.
Although the arrangements differ
in details, the general scheme of these
,deferred payment plans is the same.
Usually the dealer is required to take
one-third or One-half OF the list price
Of the car down, and the balance in
eight monthly payments. The cost OF
insuring the car against fire, theft
and transportation loss Is added, as
well as per cent interest on the
notes which the buyer gives. This is
cash sum that must be paid at the
time the initial payment Is made.
Then the dealer indorses the notes
and sends them to the banking house.
which buys them from him, less n
brokerage charge that ranges from 2
TO per cent In most cases. In one
or two instances the banking firm
sends Immediately the entire amount
others an amount of 800 to 5000 IL
withheld and the dealer gives de-
ferred certificate for this. He can
cash this certificate through the
banking house when the customer
has paid the last note. or II he wishes
he can use 1t Immediately. sending it
to the car manufactures, who will ac-
Cept It on the purchase of more cars,
less discount of per cent.
Must Investigate Prospect.
For this kind of business the plan
laid down usually specifies the kind
of person whom the dealer can sell
in this deferred payment basis, and
since he indorses the notes he Is rea-
sonably sure to satisfy himself that
the party is able to pay for the car
as agreed Certain investigation pro-
cedure Is given the dealer, and usual
ly all the necessary forms and notes
gre furnished him so that the sales
are made In a strictly uniform man.
ner and In accordance with the rules
the dealer Is instructed to follow. He
will of course, follcw them, us he
wants the notes to be taken by the
credit firm.
In most instances the plan does not
interfere with the dealers local bank
ing arrangements and there are no
restrictions II he wishes to finance
the installment sales through his local
bank he is at liberty to do so. Usually
the dealer needs all Of his local
credit for taking In the shipments OF
cars as they come from the factory,
and the new scheme is a method
whereby the dealer can take care OF
q much larger volume Of credit sales
than he would be able to do were he
entirely dependent upon his local
credit
Many will wonder why the banking
firm will not remit them the entire
face value Of the notes, less the brok-
\ erage, instead of paying all but about
10 per cent and giving deferred GER
tificate for that, paying 1t when the
car is fully paid for. This is because
It is held that the dealer must have
some interest In the transaction after
ne has made the sale and taken the
notes-Motor Age.