Financing from a dealer or Financing from a third party?

Question

which is the best option when buying a new car?

I need some opinions to both of these options.

I was reading various articles online about leasing and financing ect... although there is a low rate at the dealers. i'm having second thoughts about going through the dealers financing.

I'm going to go out to third parties and explorer other possible options to financing.

Answer 1

I have always used a Credit Union for my low interest auto loans. They are easy to work with and offer very competitive rates compared to National Banks and the Savings and Loans companies.



Smaller regional banks also offer great rates. They are straight talkers and don't try to hide the details in fine print. They are honest and trusting.



I would always recommend that you get pre-approved for a new car loan through a 3rd party lender. The pre-approval process guarantees you acceptance.



It also forces the dealer to negotiate on price not payments. They hate that because it puts you at a huge advantage. The dealer can't play the numbers game if he can't manipulate payments and percentages, rates and terms.



It also sets you into a firm budget. You'll get approved for $XX dollars. And you'll know what your payments will be based on that loan amount. Keep the price of the car within that loan amount and you'll already know what your payments will be. No surprises, no dealer bait & switch, none of that, "your pre-approved, take the car home" stuff and in three weeks they call you back and say, "we have a problem". All of these games are eliminated if you don't use the dealer finance options.



The ONLY advantage to using dealer provided financing is if the manufacturer is backing a 0% or Low interest loan program. You're local Bank or CU won't be able to match those subsidized rates.



So walk in with your pre-approved financing hidden in your back pocket. Negotiate your best price on the car and then let them know about the financing you'll be using. It's a competitive game so give them the opportunity to match or beat your finance deal. But 9 out of 10 times they won't be able to .

Answer 2

Before I begin, I need to inform you that I am a Finance Manager at a Mercedes Benz store.



Having said that, most of the people that have answered so far would have been correct up until about 4 months ago.



With the economic crisis in the housing market, and the economy inching closer to a recession everyday (if we're not already there - but that's another topic), banks are losing money left and right. Consumers are holding off on big purchases, such as; cars, boats, houses, etc. These are all items that banks typically finance since most American's are unable to pay cash for them.



Banks, therefore, are starting to lower rates. They have been extending much lower rates to car dealerships because dealerships typically send a lot of business (and money) their way. Many dealerships also have agreements with the larger national banks that prevent the bank from offering a lower rate to the customer than what the dealership can.



That being said, the dealership can now beat out the banks more often than not. You will have to negotiate the rate with the dealership, they are trying to make a profit, too (and you need to take into account that the dealerships are hurting for business in this poor economy). Many times, not all of the time, but many times, the dealership will add two points or more to your rate. This is negotiable! Do not be afraid to ask for a lower rate.



It would be in your best interest to check with your bank, the one that you do regular banking with, to see what kind of loan you can get from them. Again, you can negotiate with them as well. Let them know that you are thinking about just financing through the dealership, make them bend.



All of the above goes out the window if one of the following two scenarios occurs:



a) If you're in the military, or retired from the military, or if you work for the Federal government and can go through one of the government's credit unions, they will offer VERY low rates (i.e. USAA).



b) If the manufacturer is offering special financing, banks and credit unions will RARELY be able to match or beat. Something like 2.9% financing for 48 months, for example, is going to be very hard for a credit union or bank to beat.



I certainly hope this sheds some light on the financing side to buying a car.

Answer 3

Get approved third party first. Then you will know how much you can buy and at what rate. Then when you find the car you want, see if the dealer cant beat the rate. They are using the same banks you are , they will just try and add percentage to make a little more profit. A lot of time they will beat that rate from the same bank

Answer 4

To make a short answer of it - Dealers will giveyou a higher rate coz they get a cut in it.

Get your own finance from your bank or Capital One Auto Loan which gives great rates & takes 15 mins online, you'll get a blank cheque that lets you negotiate like cash & you wont hv to deal with bait-n-switch scams from dealer later on, if you take immediate delivery of the car. Shop for the best rates before. Dont let dealer make back-end money off your financing with them.

Answer 5

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Answer 6

the best is to go to the bank.. beware of the dealer.. he finances because he deals with people with no or bad credit.. his rates are highter.. and if you are one day late he will repo your car.. i suggest for peace of mind.. save until you have enough down.. so you can go to any bank.. they just want you to have equity in the car.. if the car is 22k then if you have 8 k down.. also you will need the money for sales tax tags and registration and insurance... when haveing a lender you will need fire and theft and collision also life insurance.. that s a lot... add all this up .. i would suggest buying a car that is allmost new from someone that put a add in the newspaper... a new car from the bank with insurance 3 k for insurance 2hundred for processing at the bank plus sales tax and the tags.. life insurance 3hundred. thats over 3 thousand just for protection for someone else.. in the paper if you buy a 2205 model and up that is allmost new.. and you save all this.. just a suggestion.. all the fees associated with a new car just overwelm me.. ok good luck.

Answer 7

it might help to be responsive to what bike you're procuring and the place you're placed. cases are difficult and deals are ample in case you be responsive to the place to look. i bought my 1100 new final three hundred and sixty 5 days with a a million.5% activity value. What i'm getting at is that purely like the motor vehicle agencies revenues are down at bike dealerships. They nonetheless would desire to circulate inventory to stay in enterprise so the ease is on your section in case you be responsive to a thank you to artwork the area. My maximum suitable advice is to attend and notice and watch for the main suitable deal. additionally evaluate finding at dealerships exterior of your community section. ultimately different than for a helmet, gloves and a jacket this is particularly useful to cut back on the kit you have chosen and positioned that funds in direction of the bike itself. one greater tip - in case you will discover a broking that has demo motorcycles they regularly rotate them earlier they attain 1000 miles. you may %. up an very just about new bike for lots much less.

Answer 8

using a 3rd party usually gets you the best rates.....go get pre approved then haggle the hell out of a sales person untill you get the best price possible....then shove it in their face when they ask you to get financing threw them

Answer 9

dealers usually have more options...i would try the dealership first.