Financing with a Bank or Dealership: What's the Difference?

If you’re looking for the best place to get a car loan in the Friendswood and Pearland area, where should you go? Most drivers turn to two places when car loan shopping: a lending institution, like a bank or a dealership. Which is the best option? What are the pros and cons of each? Find out below, and get more car buying tips with our experts at Ron Carter CDJR in Alvin.

Car Loan Shopping at a Dealership

Many Manvel drivers feel that the dealership is the best place to get auto financing. Why? Dealerships offer major savings and major convenience. Here are a few benefits to car loan shopping at a dealership:

• Dealerships can advise you on a number of car financing options, like leasing vs. financing.
• You only complete one application at the dealership, and they will send your application to a number of lenders.
• Because you’re getting multiple offers, lenders are competing for your business and getting more chances at fantastic deals.
• Dealerships offer more flexibility, whether you have perfect credit or no credit at all.
• Dealerships are also more open to negotiations, including offers on car deals and negotiations on down payments.

Car Loan Shopping at a Lending Institution

If you’re weighing where to get a car loan, a lending institution like your bank is also worth considering. This is a great option for those who have a good relationship with a bank or credit union currently, and for drivers with good credit scores. What’s the benefit to loan shopping at a lending institution? There are often set interest rates, so there’s no need to sift through tons of offers. And because you already have a relationship with the lender, they might offer more flexibility when it comes to your payment schedule.

Other Types of Auto Financing

You might run into a variety of unknown terms when car loan shopping, so here are a few other definitions to keep in mind when comparing institutions:

• Bank Financing: When you choose bank financing, the bank is providing you with the loan directly. That means you can visit the dealership with your own financing ready to go.

• Dealership Financing: When you choose dealership financing, the dealership usually does not provide the financing directly – except in the case of in-house financing. The dealership sends your application to several lenders, so they can use that competition to provide better rates.

• In-House Financing: “Buy-here-pay-here” financing is provided directly by the dealership, so there is no middleman involved. This is a great choice for those with little or no credit, but it can involve higher interest rates.

• Credit Union Financing: While many drivers opt for either bank or dealership financing, if you belong to a credit union, be sure to inquire about your options there as well.

Explore Your Car Shopping Options at Ron Carter CDJR in Alvin

Still not sure where to get a car loan? Feel free to contact us at Ron Carter CDJR in Alvin to chat about your options in person. Our team in Alvin is always ready to help, so visit us or reach out at any time. You can even apply for financing from home!