I have sold two cars with owner financing. In both cases, I collected 15% & 10% as a down payment and charged 20% & 24% APR respectively. I structured the deal so that I was able to make my initial purchase price through their initial their down payment and 18 monthly payments. However, the term of their loan was 30 months, so I was able to collect a full year's worth of payments as pure profit.
You have to understand that you are doing this to make a profit of 50% more than what you would normally collect by selling for cash.
If the numbers don't make sense then don't do it. But if the numbers are there, and you don't have anything to lose then why not try it. Anyone that tells you its a bad idea are speaking from FEAR and not from FINANCE.
I used a Automotive Loan Servicing company to collect payments for me. On my second deal, they even offered to by my note but they only wanted to give me 70% of the note value. In addition to handling payment, they checked the status of insurance every quarter. But I later learned that you can send a directive to the insurance company to notify you if they ever lapse. Then you have grounds to repossess but it has to in your Retail Finance Agreement.
There are a lot of people that can't get financing for a decent car. You can provide financing for a vehicle and net a good return on your assets.
And...
Anytime you arrange owner financing, then you are earning income that taxable to the IRS. So, obviously it is important to understand that you have to both report and pay taxes on the interest that you've earned.
Although I have a personal accountant, any tax preparation firm can prepare a 1099-INT for you to report the interest portion of the payment that you receive.
By charging the buyer interest, I acted like a finance company so I paid tax on the interest income. It's no different than paying tax on the earnings of a stock dividend.