Which is the best way to finance a used car — through a bank or through a dealer? Will you get a better interest rate going directly through a bank? Will the dealer give as good of a deal if he does not get a cut on the financing?


6 Responses to “Is it better to finance a used car through a bank or through a dealer?”

  1. ScienceChic on July 27th, 2011 11:10 pm

    bank. lower interest rates, not vying for your money (well, not as bad as car dealers since the economy is being notoriously down)

  2. Robert W on July 29th, 2011 10:01 am

    Come in with your own financing. The dealer will use the fact that they’re financing against you. They won’t give you a “great” deal on the price of the car AND “great” financing terms.

  3. Eric B on July 31st, 2011 3:30 am

    Ask to see their rate sheet so you know you’re not getting held on. They get these sheets from the banks faxed to them every week or so.

  4. brighteyes on August 1st, 2011 10:33 am

    Banks tend to offer lower interest rates, but sometimes dealerships will have special offers. Shop around for the best deal. The best rate will depend on where you go.

    Here’s a link to help you with financing:

  5. http://Financeinformant.com on August 1st, 2011 4:01 pm

    generally banks will give you a lower finance rate over dealers however, it will be slightly higher than a new car loan because its a used car.

  6. Scott D on August 2nd, 2011 8:55 pm

    There’s no right or wrong answer to this question. The best thing you can do is shop around and weigh your options.

    Generally speaking, if you can find financing from a source other than the dealership, be it a bank, credit union or consumer finance company, you’re likely to wind up with a better interest rate.

    In the interest of disclosure, I happen to work for FirstAgain, an online consumer lender, and without hesitation I can say that our auto loan rates are far superior to what you’ll be offered at a dealership.

    But the lowest interest rate doesn’t always translate into the best overall deal. Naturally, the dealership wants you to use the in-house financing option, so they may be inclined to sweeten the pot by offering to lower the sale price or include upgrades at no extra charge in exchange for your agreeing to finance through them. In that sense, you can potentially use financing as leverage to create a better overall deal for yourself.

    So really it all depends. Like I said upfront, the best decision you can make is the decision to shop around and consider all available options. That’s the surest way to wind up with the loan that’s best for you.

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