Most floorplans require a personal guaranty. We already talked about what a personal guaranty is, but watch this video for an explanation specifically as it relates to floorplans and auctions.
Below is a transcript of the video:
Most floorplan financing options will also require a personal guarantee from a dealer.
I already spoke about what a personal guarantee is, but just as a reminder, a personal guarantee is where an individual guarantees the obligations of a contract signor.
Sometimes the contract is being signed by a business, and an individual is guaranteeing or in the case of a car sale, it’s kind of like a co-buyer. The first buyer is the one driving the car, they’re the ones really buying the car, but the co-buyer is guaranteeing the obligations. Even when there’s not a co-buyer but there’s a separate guarantee where someone is guaranteeing the obligations of another. An auction oftentimes will require that for the simple reason that the auctions understand that corporate law protects the individuals and the corporation and the auction and wants to get around that by having a personal guarantee by an individual.
For more videos on the Georgia Car Law Authority series, please visit www.georgiacarlaw.com.
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