When it comes to buying used car, the most common sort of auto financing that occurs is financing through the dealership. When you finance a car through the dealership, you enter into a contract with the dealership to pay the amount of money financed, plus a specified amount of interest, over a period of time. Often, the dealership will keep the contract, but in many cases it sells the contract to a bank, credit union, or finance company.
Dealer financing is convenient for the buyer. You can pick out your vehicle, sign all of the paperwork, and drive away without having to go somewhere else to get approved for a loan. In addition, dealership financing is good for the buyer in that the dealership may have a relationship with a number of finance companies, and thereby offer the buyer many options. Finally, dealerships may offer special low rate financing options from the manufacturer, as well.
There are some things you can do to get the most from dealer financing. Get your credit report ahead of time, so that you can correct any errors. Identify what your transportation needs are, so you know what kind of car to buy. Check out reviews and buying guides, to know what the price range is for the vehicle you’re looking for.
With a little preparation ahead of time, you can truly make dealer financing of your used car work for you.