Four Reasons Why You Should Consider Car Dealer Financing

Car dealer financing is one of the many options available to you when it comes to financing the purchase of a new vehicle. However, financing through a dealership may be more advantageous for you because it can offer additional beneficial lending options that banks and other lenders can't provide. Read the four reasons below as to why you should consider car dealership financing.

The entire process to purchase your vehicle is significantly easier with a car dealership rather than through a banking institution or other professional lending institution. This is because car dealerships offer a number of interesting incentives including flexible interest rates, increased services, and extended warranty offers. With the number of options available to you, in addition to the vehicle being readily available to drive off the same day as you purchase it, financing through a dealership can be a faster and more efficient process for you overall. This option works best if your primary concern is getting a new or used car quickly and without a great deal of hassle.

Most automotive dealerships deal with large volumes of loan applications and have their own loan departments in most cases. For this reason, they are capable of offering financing at relatively low interest rates. On the other hand, banks and credit unions may opt to offer higher rates because the auto loans they offer may not be as high in demand. Overall, the large volume of loans that car dealerships encounter allows them to offer lower rates for potential buyers.

By working with a dealer, you may have access to rebates and credits only available to those who finance their purchase with the dealer. Often, particularly in a slower economy, the dealers create incentives for buyers to finance their cars by offering very low credit rates and extended financing. Sometimes, dealers can offer 0 percent or 1 to 2 percent financing on new cars, where banks and credit unions are forced to charge many times that rate. Since the dealers own the vehicles and don't have to borrow money in order to make a loan, they can offer lower interest rates. For the same reason, dealers can offer a six or even seven year loan to buyers of expensive new cars. This can lower the monthly payment into a range that is affordable for a buyer, where a four or five year loan may have payments that are too high.

Not only is a car dealership better able to accommodate bad credit scores, but they also make it easier to re-finance when it is necessary to do so. While you may get a higher interest rate or a higher monthly payment now through a dealership as a result of a poor credit score, within six months to a year you can easily refinance your auto loan for a lower interest rate and even potentially a longer term if you so choose. Overall, used car dealerships tend to be much more accommodating and flexible when it comes to auto loan financing, even for people with bad credit.