What are the main differences between bank financing and dealer financing for a car loan?
I keep hearing conflicting stories about whether bank financing or dealership financing is better for the car loan. In actuality, I don't even know the difference. What are the differences between dealership and bank financing?
“The main difference between dealer lending and bank lending is that the dealer usually acts as a middleman.
Dealers often work with numerous lenders to find the best rate for your car loan. With a dealership, you don’t have to do any legwork to get the loan other than filling out some forms.
Bank lending cuts out the middleman and may result in a lower interest rate, but not always. However, you’re responsible for going to the bank and doing all the paperwork to get the ball rolling.
Either route you choose, the lender will require full coverage car insurance. Full coverage can be pricey, but you can save money by comparing rates. Jerry does all the hard work for you, pulling quotes from the top 50 companies and delivering the best deals to your phone in minutes. Jerry even does all the paperwork for you so you can just relax and enjoy your new car.”
MORE: What is a Car Lien?
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.
Read advice from car experts at Jerry
Browse by topics
What others are asking
Can car dealers force loan insurance on a car loan?
I went to a dealer to shop for a car and planned on financing through them. When I looked through the paperwork, I noticed a $900 charge for loan insurance. The salesman told me that this was a requirement to get the promo APR. Can car dealers force this loan insurance on you?
Aug 10, 2021
What happens if the amount owed on a car loan is worth more than the value of the car when you want to sell?
I have a car that I want to sell. Unfortunately, the balance of the loan is more than the value of the car. What happens when I go to sell the vehicle?
Aug 10, 2021
How do I donate a car to Goodwill?
I just purchased a new vehicle and want to get rid of my old vehicle. It's a 2004 Mitsubishi and it runs fine. I thought the best option would be to donate the car. How do I donate a car to Goodwill?
Aug 20, 2021