Dealers often refuse outside financing simply because they can make money off of dealer-arranged financing — sometimes to the tune of thousands of dollars in profit.
Can I get a car loan with an existing loan?
The answer is yes! You can have two car loans at one time, but you must be mindful that it may be more difficult to qualify for a second loan. Lenders will only approve you if your income and debt can handle the added monthly expense. In addition, you will need good to excellent credit to receive a low APR.
Can a dealership refuse outside financing in Massachusetts?
Dealerships can refuse any type of financing for any reason.
Is it better to finance through dealership or bank?
The primary benefit of going directly to your bank or credit union is that you will likely receive lower interest rates. Dealers tend to have higher interest rates, so financing through a bank or credit union can offer much more competitive rates.
Why are dealerships not accepting outside financing? – Related Questions
What is the best time to buy car?
The best time to buy a car is usually around the end of the year since salespeople will be trying to meet their quotas and may offer steep discounts. However, you should also consider holidays and the beginning of the week.
What is a good interest rate on a car?
The average auto loan interest rate is 4.33% for new cars and 8.62% for used cars, according to Experian’s State of the Automotive Finance Market report for the second quarter of 2022. With a credit score above 780, you’ll have the best shot to get a rate below 3% for new cars.
Is financing with a dealership a good idea?
Dealership financing is convenient, but you will generally be better off with a loan from a bank, credit union or online lender. Not only will it let you negotiate the car price better, but you will also be able to find a solid deal on interest — something dealerships rarely have.
Is it better to get loan from bank for car finance?
Vehicle finance from banks may give you more flexibility, and you can prepay a part of the loan or the entire amount before the end of the loan duration. Generally, you’ll get a lower interest rate if you choose a bank loan over dealership finance.
Why dealership financing may be a better choice than a bank?
The major advantage a dealership has over a bank is that it is open to negotiation. Loan amounts, interest rates, and payment terms are much less negotiable with a bank. Dealerships cooperate on the asking price, loan term, and interest rates to tailor the best option for you.
Should you ever finance through a dealer?
In general, you can usually get lower interest rates on a new car through a dealer than on a used car. In fact, some dealers may offer promotional financing on brand-new models, including rates as low as 0% APR to those who qualify.
Why do dealerships want you to use their financing?
“Car dealerships want you to finance through them for two main reasons: They can make money off the interest of a car loan you get through them. They may get a bit of a kickback if they’re the middleman between you and another lender (commission).
What credit score should I have to buy a car?
In general, you’ll need a credit score of at least 600 to qualify for a traditional auto loan, but the minimum credit score required to finance a car loan varies by lender. If your credit score falls into the subprime category, you may need to look for a bad credit car loan.
Why do dealers like down payments?
“It’s actually a split, but in most cases, dealers will gladly take your money. Without getting into the jargon behind it, the time value of money states that money in hand now is worth more than in the future due to inflation. Therefore, a big down payment will usually cause a salesman’s eyes to light up.
How much should I put down on a 30k car?
If you’re buying a $30,000 car and make a 10% down payment, the down payment would be $3,000 at the time of sale. This down payment can be paid with cash, by trading in your old vehicle or a combination of both.
Why should you not put a downpayment on a car?
We’re outlining four reasons you might have for not making a down payment, and what the possible outcomes could be.
- “I have enough cash to pay for the vehicle outright.”
- “A down payment doesn’t make a big difference.”
- “They’re asking for too much money upfront.”
- “I need a car now, and don’t have time to save for one.”
What is considered a large down payment on a car?
When it comes to a down payment on a new car, you should try to cover at least 20% of the purchase price. For a used car, a 10% down payment might do. Part of your decision will depend on where your credit score stands.