5 Dealer Financing Tips

After you agree on the price for your car purchase, and you are not paying cash, the dealer financing department will tell you the interest rate for a loan. If you have already found a better rate elsewhere, take it, or negotiate with the dealer to get a better rate.

1. Dealer Lenders 

These are mainly local banks, as well as the finance company of their manufacturer. The dealer wants you to finance through their source, so they can profit from your loan interest. 

2. Find Out Your Bank's Rate 

Call your bank and find out their rate. See if you can get a discount if your monthly payment is automatically taken from your bank account. 

3. Check Online 

There are many lenders available online. Make sure to check the reputation of the lender you choose. If you can find a good rate, consider taking it. 

4. Negotiate 

Tell the dealer the best rate you have found. If they do not match it, use your bank or online lender for your loan. 

5. Loan Closing 

When you finance with the dealer, they will try to get you to buy an extended warranty, or other assorted extras. Do not take them unless you are sure they are worth the cost.