How can a dealer offer a better APR on a car loan than my bank?

I got preapproved for a 60 month loan at 3.59%. I went to the dealer, they asked about my financing, and they said they could offer 2.99%. How can a dealer beat my bank on a car loan?

“Car dealers often offer competitive rates to sell more cars.
Before agreeing to a loan through the dealership, read over the finance agreement. Dealerships sometimes change or raise the price of the car as a result of the lower interest rate. They use this tactic to bait you into thinking you’re getting a better deal.
You can compare the terms and conditions of the dealership’s loan to your bank’s. If the dealership’s offer is truly a better deal than your bank’s, you should feel comfortable financing through the dealer.
Don’t forget that when you buy a new vehicle, you will need proper coverage. If you haven’t already found insurance, use the free Jerry app to help you find the best deal. Jerry compares rates from the top 50 companies in under a minute, delivering the best deals to your phone.”
Eric Schad
Answered on Jul 30, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.

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