What's the major difference between financing through a bank or through a dealer?
"What's the difference between going through the dealer for financing or going directly to a bank? I was going to buy a car through the dealer and they said they offer comparable rates to banks and credit unions."
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Answered on Jul 28, 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.
“In some cases, there’s no difference at all. Dealers commonly work with these lenders in a process called dealer-arranged financing. Essentially, you’re trusting them to shop for new car loan rates on your behalf.
Because they’re shopping for you, you have no way to know if you’re getting the best deal.
In some cases, dealers will arrange financing that gives them a kickback. As a result, shopping for a car loan rate on your own can help you save money and determine what a fair interest rate is for your income and credit.”
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