Which Car Loan is Best – Dealership or Bank?

August 14th, 2018 by

Couple Meeting With Finance Woman

Apply for Financing

If you’re looking for a new or used car in Cicero, you’ll probably be taking advantage of auto financing. However, you’ll want to do your research before you sign any papers so you can be sure that you’re getting the best monthly payments and interest rates. Find out whether financing through a dealership or bank is the best option for you, then work with the Used Car King finance department to walk you through the rest of the process.

How to Find the Lowest Rate

While there’s no sure way to tell whether your dealership will offer a lower interest rate than your local banks, dealer financing is actually the same as bank financing in many cases. The dealership simply does the legwork for you by doing your research for you. It can be useful to visit your bank before shopping for a vehicle though because you can find out their rate first. Then, you can compare that to your dealer’s to ensure you’re getting the best rates.

Beautiful young couple signs documents
Couple signing sales contract for car at dealership

Dealer Financing

  • Pros: Automakers will occasionally have promotions where they offer very low interest rates on new cars, which a typical bank wouldn’t do. Dealers will also “shop around” so to speak, and will find the best bank rate in the area.
  • Cons: Dealer financing is a common option because it offers the simplest route to buyers – they can choose and finance without leaving the dealership. However, it’s important to ensure that your dealership isn’t marking up the bank’s rates in order to make money.

Bank Financing

  • Pros: The main advantage of car financing through a bank is that they won’t mark up interest rates as some dealers might. Because of this there’s no middleman, so rates could potentially be better.
  • Cons: You can negotiate interest rates with your dealer, but banks will typically offer just one rate. They also won’t shop your credit around to lenders like dealers do.
Couple getting car keys
Car Salesman Speaking with Couple

Rely on Used Car King for Finance

Regardless of whether you finance through a dealership or bank, you can rely on the experienced finance department at Used Car King! Contact us for more information on the process, and be sure to visit our Cicero dealership when you’re ready to browse our inventory in person.

 

 

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Posted in Buying a Car