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.”
Eric Schad
Answered on Aug 10, 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.

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