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.
Answer provided by
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.”
Did this answer help you?
Ask us a question by email and we will respond within a few days.
Have a different question?
You can meet us at our office and discuss the details of your question.
Browse by topics
What others are asking
Is a 15% interest rate too high for a car loan on a certified pre-owned 2016 Toyota 4Runner?
I'm buying a certified pre-owned Toyota 4Runner, and I have $5,000 to put down. My credit score is only about 660. The dealership wants to charge me 15% interest on a 60-month loan. Is this too high?
May 05, 2021
Should I give a potential buyer of my Tesla Model X a copy of the title for their loan-approval process?
"I'm selling my Tesla Model X. The buyer wants to make sure he can get approved, but he says he needs the title to do so. Should I give a potential buyer a copy of the title?"
May 28, 2021