One of the first decisions you’ll make when you decide to finance a vehicle purchase is where and how you’ll finance the purchase. The most common ways customers finance is through the dealership they purchase the vehicle from, a credit union, private lending, or their banking institution.
How Are You Financing a Car Purchase?
Financing is one way to take home and drive a new or used vehicle without paying 100 percent upfront (leasing is the other). Since paying full price is typically unrealistic or undesirable for the majority of vehicle owners, financing is the option 43 percent of vehicle owners choose. Because it’s such a popular option, I covered the basics in Financing a Car 101. Today, I’m focusing on the benefits of financing through a dealership.
1. National Interest Rate Options
When you choose to finance a car or vehicle purchase through the dealership you purchase from, you access a competitive pricing market. Dealerships have dedicated financing staff, sometimes even entire financing departments, whose primary focus is getting the right deal for their customers. Because of this, dealerships build relationships with many lenders and can offer a range of financing options.
2. Negotiable Interest Rates
At dealerships, you’ll find a higher degree of flexibility with financing options. Finding the best rates takes time and effort, which is part of the reason dealerships can offer more flexibility in determining your rate. If you work with a lender or institution who finances as part of their regular tasks, they might not have the time or resources to locate the best price.
3. Promotional Interest Rates
Throughout the calendar year, dealerships run many promotions. Some of these promotions include discounted or factory financing. Sometimes, you can even find a promotion for an interest rate of zero.
4. The Dealership Does the Legwork
Perhaps the greatest benefit customers receive from financing through a dealership is the convenience. If you want to shop, finance, and take your new vehicle home all in one day, financing through a dealership is your best option. Truly, all you need to do is bring your information and sign a few documents. It’s the top option for convenient, one-stop shopping.
Financing Through a Dealership
By choosing to finance a car through a dealership, you gain access to countless lending institutions, and your rate is negotiated on your behalf by an employee of your dealership. Dealerships can work with just about any type of buyer, and they will work to find financing options to meet the individual needs of the customer.
Individual dealerships may have additional options or methods for lowering your financing rate, like having your payments directly deducted from your paycheck. Be sure to ask what options are available to you.