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Does the bank or the dealer have all the risk on a car loan?

Just out of curiosity, who has all the risk on the car loan: the lender or the dealer? I'm buying a car from a dealer, but they're arranging the loan for me from a lender.

avatar
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
“Unless the dealer is doing in-house financing, 100% of the risk of the loan lies on the lender. They’re the ones giving you the money for the purchase, so if you don’t pay, they’re the ones that are out the money.
Dealers are pretty much absolved from any other interaction following the
new car loan
, unless you bring the vehicle in for servicing.”
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