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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?

avatar
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
“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.”
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