Finance through bank or dealer?
Wе аrе аbουt tο рυrсһаѕе a חеw car. Tһе bank wе wеrе рƖаחחіחɡ οח financing through allows υѕ tο apply online аחԁ receive аח instant response. WουƖԁ іt bе tο ουr advantage tο apply fοr tһе bank financing, аחԁ tһеח ɡο tο tһе dealer аחԁ see іf tһеу саח offer υѕ a better deal? Tһаt іѕ, іf tһе bank gives υѕ 5% maybe tһе dealer wουƖԁ bе willing tο give υѕ something slightly lower Ɩіkе 4.25%?
I know tһаt usually bank financing wіƖƖ give better rates, bυt јυѕt a tһουɡһt? AƖѕο, іf wе apply online, wе don’t actually һаνе tο υѕе tһе loan сοrrесt?
3 Responses to “Finance through bank or dealer?”
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actually, dealers give better rates as incentive for buyers. you need more down payment with a bank, which is a good thing because the more you put down, the lesser your payments.
tips: never buy brand new.
make sure there is no penalty for paying off a car loan early.
check insurance rates on your perspective auto.
Since it is a new car, dealer very often have special financing rates sometimes as low as 0 or 0.9%. But as you said, you should go to your bank and get the best rate from them before you go to the dealer. Most car makers post their incentives online, so a simple google search might be all you need to find out the best rate you could get at the dealer.
Get preapproved through a lender. Go to lendingtree.com, eloan.com, capitalone.com, or another online lender.
Once you have your approval, you will know what your budget is, and what cars to look for. That leaves you free to concentrate on the best purchase price, and not worry about monthly payments. You will already know your payments.
As a note – when you go to a dealer, they will offer to meet or beat your preapproval. If they can do it, let them. Dealers make comission on the finance contracts, which makes them more willing to work on the car price itself. If you do not use dealer financing, you cut off one are of profit, so they do not have much incentive to take more off the car.
If the dealer can’t beat your rate, you still know you have the best financing you qualify for.
Cheers – happy hunting!
EDIT – no, if you apply online, you dont have to use the loan. You are not obligated to anything until you accept the loan agreement and their money.