Getting an Auto Loan: Bank vs. Dealership
Before you sign the papers at the dealership, you might want to consider if you can get better interest rates and lower your payment by financing your next car through a bank or credit union.
Who Offers a Lower Rate?
Take a look at the pros and cons of getting a loan through a dealership or through an online lender. Banks, online banks and credit unions offer competitive rates for car loans. Just keep in mind that the lowest rates are offered to those with good credit.
If you want to finance through a dealership, make sure you know which banks they partner with and what their rates are.
Using a lender from a dealership is simple. The dealership will handle the necessary paperwork for you from the lender. All you need to do is sign.
You may not get the best rate, since many dealerships work directly with specific banks that may not have the best rates at the time you purchase your vehicle.
Online banks are known for great interest rates, including auto loans. If you have an online bank in mind, find out if they are affiliated with the car you want to buy.
Online Lender Pros
Shopping around for the best online bank might be worth your time, since online banks typically offer attractive interest rates.
Online Lender Cons
There's no physical branch or location to turn to, in case you want to speak to someone, in person.