Should I avoid financing with the car dealer?

Should I avoid getting a loan through a dealer? I'm going to buy a car from a dealer, but I need a loan. I've heard that financing through a dealer can be a headache.

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Eric Schad
Answered on Jun 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.
“Some dealerships are fine with regard to financing a new car and don’t use any unsavory business practices.
However, the main reason that people don’t go with dealerships has to do with rates and fees.
If you use the dealers, you’re likely going to pay some clerical fees, as well as have to negotiate your interest rate. If you choose dealer-arranged financing, you might also be upcharged on the interest rate, as dealers can get kickbacks and bonuses.
If you go straight to the lender, you won’t have to worry about any of this. The rate you get is what you get, and you shouldn’t find any hidden fees. It’s often the way to get the best rate and forge a relationship with your lender.
Whichever financing method you choose, paying a large down payment will help you save money in the long run.”
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