Why Dealership Financing May Be A Better Choice Than A Bank
Why Dealership Financing May Be a Better Choice Than a Bank
You're ready to buy a car! Whether you're buying a new or used one, financing is a major thing to consider. The first thing to know is that you have options. You can get your new car loan from a bank or from the dealership. The second thing to know is that the interest rate, while a major factor, is not the only thing to consider. We want you to stay informed about your financing options. Read on as we compare car financing options.
Bank Financing vs Dealership Financing
Bank
Many people tend to go first to the bank for auto finance options. While it might seem like a good idea to take out the car loan from a bank and then start shopping for a car, you would be missing out on comparing dealership finance options. And while bank preapproval is possible, it isn't a guarantee of loan approval or that you'll receive the expected rate and terms.
Banks tend to have stricter rules and regulations for the lending process than dealerships. They also have high administrative fees that significantly impact the overall cost. It's worth noting that banks provide decent loans only to those with great credit scores. If you're looking for used car finance options, banks still require significantly good credit. On the other hand, there are many dealerships that will provide convenient finance options even with lower credit scores.
Dealership
The major advantage a dealership has over a bank is that it is open to negotiation. Loan amounts, interest rates, and payment terms are much less negotiable with a bank. Dealerships cooperate on the asking price, loan term, and interest rates to tailor the best option for you. Car dealerships have relationships with many finance companies and with the original equipment manufacturer's (OEM's) finance company. The dealer gathers different offers from finance institutions, credit unions, and the OEM's finance company to secure the best financing offer for you. Dealership financing advantages include:
- Convenience
Shop and secure financing all in one place. Dealerships also have a specialized Parts Centre and Service Centre that maintain and repair your car.
- Easier Approval
Even with lower credit scores, financing is always an option with a dealership.
- Competitive
Dealership financing options may match the bank's offer and even include extra incentives in the form of lower interest rates, discounts, rebates, and added car features.
Choose Dealership Financing
With this knowledge, you can be confident and ready to make a well-informed choice. Mentioned above are only a few of the reasons why dealership financing may be a better choice than a bank. At Metro Chrysler in Whitehorse, YT, our Finance Centre will provide you with support and help you create a financing package that suits your specific needs. You can finalize your car purchase by browsing our new inventory to find the right car for you.