How does inhouse car finance work?
I’m looking to getting a new car but I don’t know much about financing. A lot of our local dealerships say they do in-house car financing. How does it work?
“Terms and conditions around financing can be confusing!
When you decide to buy a car, you typically have two options if you’d like to get a car loan. Either in-house with the dealership or outside through another lender, like a bank or credit union.
In-house car financing tries to make everything easy. Once you decide on a car you like, the dealership will handle all the paperwork and financials. Because of this, dealerships with in-house financing are also called buy-here, pay-here.
Unlike traditional lenders, dealerships often don’t judge your loan worthiness by your credit score alone. If you have bad credit or no credit, in-house financing can be useful. However, since the dealership controls the loan, you may spend more money on interest or have less favorable terms than through a bank or credit union.
No matter where you get financing, try to do the following:
- Put down a large downpayment
- Get a low APR
- A less than 72-month loan term length
- Make sure there are no prepayment penalties
If you’re considering financing your car, be sure to budget for the cost of insurance as well. You can get personalized car insurance quotes easily with the Jerry app. Jerry gathers quotes from the top 50 insurance companies, making it easy to budget for your new car!”
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