If you are considering a new or used car purchase, you may have wondered “is it better to get dealer financing or to go through your own bank”. In order to figure this out you will need to look at what each option entails.
If financing through your local bank, you may need to do a few extra steps. First, if financing through your own bank, it may be helpful to make sure they even have an auto finance program that will suit your needs. If you are going to look at cars that are ten years old you should make sure that your bank will even finance cars that old. Once you have talked with your banker about what programs they have and if they will suit your needs, you should go out and purchase a car. From there you can bring your purchase contract to the bank so they can process the information and approve or deny your request. Please note, your lender may not want to finance the full value of your car, in this case you will need to give the dealer the balance of the money due.
If financing through a dealer, you can skip the first portions of this process and go straight to picking out a car. Once you have found the right car, simply give the finance department your info and they can do all the finance work for you. Dealerships are happy to make this part easy since they cannot sell you a car unless you either pay cash for your purchase or you get financed. Many dealers will have access to dozens of lenders so their will likely be more finance options. The dealership may even have a relationship with your lender and be able to get your loan approved with them if you prefer. Many times, dealers will offer an incentive to use their financing. They will do this because they may get paid from their lenders to secure your finance.
Someone looking to get auto financing may only finance a car even two to ten years. Many dealers finance a hundred or more cars per month so they can get loans at a discount. If you go to Wal-Mart you can expect a low price because they have huge buying power, dealerships can offer the same benefit and maybe even get you a lower interest rate than your bank.
