Which Car Loan is Best – Dealership or Bank?
Whether you’re searching for a new car or used car in the Brandon area, it’s likely that you’ll take advantage of some kind of financing. However, it’s important to do your research before you sign papers at the dealership so you can ensure that you get the best interest rates and lowest monthly payment available. Find out whether financing through the dealership or through a bank or credit union is best for you, then rely on the Bob Boyte Honda finance department to walk you through the process!
How to Find the Lowest Rate
There’s no surefire way to tell whether your dealer will offer a lower interest rate than your bank; in many cases, dealer financing is actually the same as bank financing. The dealer simply goes to the bank and does the legwork for you — oftentimes they have options from multiple banks. However, it can be beneficial to go to your bank before choosing your vehicle so you can find out their rate first. Then, you can compare that to your dealer’s and see if your dealer can match the rate if the bank’s is lower.
- Pros: Automakers will occasionally have finance promotions where they offer very low interest rates on new cars, which a typical bank wouldn’t do. Dealers will also “shop around” so to speak, and will find the best bank rate in the area. Many dealers present the rates of multiple banks so you don’t have to run all over town trying to get a loan.
- Cons: Dealer financing is a common option because it offers the simplest route to buyers – they can choose and finance without leaving the dealership. However, it’s important to ensure that your dealership isn’t marking up the bank’s rates in order to make money.
- Pros: The main advantage of car financing through a bank is familiarity. Most people buy a car every 5-10 years or so, and a dealership financing office might feel unfamiliar while your bank or credit union is a regular destination.
- Cons: You can negotiate interest rates with your dealer, but banks will typically offer just one rate. They have no real incentive to negotiate, as it’s not their car they are selling. They also won’t shop your credit around to lenders like dealers do.
Rely on Bob Boyte Honda for All Things Finance
Whatever financing route you choose, you can count on our experienced finance department to help you through every step of the way. You can even find features to learn more about trading in a financed car. Contact us for more information, and make your way to our Brandon dealership to browse our new vehicle inventory in person!
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