Getting a Car Loan: Bank Financing or Dealer Financing

You’ve decided to buy a car. While we’re sure you would prefer to walk into a dealership to make a cash purchase, the reality is that most people will not be able to do so. In that case, you will need to finance the vehicle.

There are two main options for financing a vehicle. You can get a loan from a bank or credit union, or you can take advantage of dealer financing.

What is dealer financing?

In dealer financing, loans are originated by a retailer and then sold to a bank or credit union. Most people are of the view that a bank or credit union is the best source for an auto loan but that is not necessarily the case. There are benefits that make dealer financing a good option to consider when purchasing a vehicle.

Here are a few of those benefits:

1. You can access car loans with bad credit

One type of loan that you can access from a dealer is a subprime auto loan. While individuals with bad credit or no credit history often have a difficult time securing any sort of loan from a bank or credit union, subprime auto loans are loans that are specifically created for people who would otherwise be ineligible for car financing. This is good news if you are a recent graduate, just filed for bankruptcy or have obligations that have negatively affected your credit scores. If this is your reality, you should still be able to access a car loan with ease.

2. Competitive rates

Lots of dealers offer more attractive rates than that offered by banks and credit unions. Because most people assume that the bank rates are better, they do not bother checking it out. However, it is always a good idea to check all your options and compare the rates.

3. 0 down

Dealer financing is not only a great option for those with bad credit. It is also great for those with excellent credit scores as well. Dealers often offer 0 down loans and discounts as a bonus for those with an attractive credit report.

Normally when purchasing a vehicle using an auto loan you a required to pay a portion of the price upfront. With 0 down car loans, this down payment is worked into car loan instead. With this kind of loan, you will be able to buy the vehicle you want without dipping into your cash reserves.

4. Flexible repayment terms

Are you in search of a flexible plan that will make your loan easier to handle? If yes, it might be worth your time to explore dealer financing. You may find that a loan from a dealer is less restrictive than a bank or credit union loan. If necessary, you might be able to benefit from a longer repayment term. An extended repayment term means that your monthly payments will be more affordable.

Why should you choose a Credit Now car loan to finance your vehicle?

Whether you are finding other lenders reluctant to approve your car loan application or you have excellent credit and are just in search of better rates, Credit Now has a loan for you. We have worked with thousands of drivers from all financial histories and credit backgrounds. With the largest network of lenders, we serve all of British Columbia; from downtown Vancouver to the far North.

So, if you’re in British Columbia and you’re looking to buy a car, contact us today. Let our loan consultants work towards putting you behind the steering wheel of your dream car.

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