Which is better, a line of credit from my bank or dealer financing for a new car?

"Do you get a better deal financing a car at a dealership or through a bank? I have an appointment to meet with a dealership today about a new car that I want to buy. I have applied for a line of credit from my bank, but they have not gotten back to me yet about interest rates or terms."

Answer
“You would probably come out better using your own bank’s financing to buy a new car. Sometimes, it can be quite a bit of difference.
On top of financing charges, the dealership could also work in hidden fees and a dealer reserve, which adds 2% to the interest rate that you actually qualify for through dealer financing.
You would be better off ending your meeting with the dealership by saying you are considering your financing options and waiting to hear back from your bank.
If you do go with dealer financing, consider a large down payment and the length of your loan to avoid paying too much in interest.”
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Johnny Puckett
Answered on Jul 07, 2021
Johnny Puckett is a freelance writer and automotive expert. He has contributed content to a number of some of the largest online publications, aftermarket automotive manufacturers’ sites, and automotive informational sites. His experience in the automotive and information fields informs his writing at Jerry. His automotive interests bleed into his free time, where he enjoys modifying his favorite cars and woodworking.
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