Should I get a car loan through the dealership?

I’m about to buy a car. Is it a good idea to apply for financing through the dealership?

“There are benefits to getting a car loan through the dealership, but there are things to watch out for, too.
Loans through the dealership work the same way as a loan through the bank would. The benefit of taking a loan out through the dealership is it will cut out a step for you.
If you decide to take out your loan through the dealership, you’ll fill out a credit application once your offer is accepted. Then, the dealer will submit that application to different lenders so you can compare rates and terms.
Since your dealer will be negotiating the terms, however, there are certain things to watch out for if you want to avoid paying more than you need to.
Sometimes, dealers will raise the interest rate on the loan, then pocket the difference as payment for processing the loan. For this reason, dealership-negotiated loans are notorious for having higher interest rates, and you may need to refinance your loan in the future.
For that reason, if you have time, it’s worth gathering quotes from banks yourself.
If you’re shopping for a new car, you should also be shopping for new insurance. The Jerry app makes this process easy by collecting insurance quotes for you, so you can compare prices and policies quickly and easily—for free.”
Liz Jenson
Answered on Sep 24, 2021

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