Should I Finance My Car Loan Via Car Dealers or Banks?

When considering financing options for a car purchase, many New Jersey car buyers we’ve helped get confused by the services provided by banks and auto dealerships. The option banks and credit unions offer is usually called “direct auto lending,” which means that you negotiate the interest rate, commitment term and get loan directly from the money lenders. You are able to do it even before you buy a car. On the other hand, the financing service offered by auto dealers is called “indirect auto lending”. Dealerships make loan with customers and immediately sell it to lenders, like banks or finance companies, which lave long relationship with the dealership.

Customers always have the option to seek financing through banks and credit unions. Financing through the dealership has many advantages:

1. Dealer finance (business) manager has the ability to find the best offer from a multitude of banks with the click of a button.
2. Interest rates offered to dealers for retail customers are commonly less than offers made directly to the consumer.
3. Financing through a dealer is extremely convenient and a one stop process for the retail customer.
4. Many lender approvals may require stipulations for approval, which could are more easily addressed by the dealership.
5. Finance (or Business) Managers are very experienced at negotiating with lenders and can help negotiate the best offer for the consumer.

Quick tools Nutley Kia offers:

• Free credit car loan application 
• Monthly car loan payment calculation

To learn more about the financing options we offer for Newark and New Jersey car buyers, check out our auto finance department page.

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