What are the pros and cons of getting financing from a dealership?

I'm a first-time car buyer. I've been told that getting a loan at the dealership is easy, but dealers only offer loans where they make the most money. I'm not sure what to do. What are the pros and cons of dealer financing?

Answer
“While you’ll need to come to your own conclusion about financing, there are some common pros and cons of financing with a dealership.
Pros:
  • Takes the legwork out of finding a loan
  • May have attractive promo rates
  • Works with many lenders to find you the best rate
Cons:
  • May have higher rates than direct lending
  • High-pressure loan practices
  • Hidden fees due to kickbacks and commissions from a lender to the dealer
While it’s important to know the pros and cons of financing with a dealer, you won’t know your options until you look into multiple lenders. Just how you would shop around for car insurance or home insurance, you should shop around for your car loan.
When you’re ready to buy a car, remember to shop for car insurance before signing for the loan. Most lenders require full coverage.
Full coverage can be pricey, especially if you use the lender’s insurance, 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.”
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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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