Which Car Loan is Best – Dealership or Bank?

June 14th, 2018 by

Man giving keys to another man

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.

Dealer Financing

  • 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. 

Bank Financing

  • 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 carContact us for more information, and make your way to our Brandon dealership to browse our new vehicle inventory in person!

Find Your New Honda Now

More from Bob Boyte Honda

  • What are the 2020 Honda Odyssey Safety Ratings?

    When you get behind the wheel of a Honda van you want to ensure that you not only have all of the performance specs and cabin space for a smooth, comfortable ride, you also want plenty of safety features to have your back. That’s why the 2020 Honda Odyssey safety ratings display this model’s unique…

  • 2020 Honda CR-V Dimensions

    Whether hauling furniture around Madison or carpooling to school in Ridgeland, a great SUV has all the space you need to easily accomplish any task of the day. And if you want a vehicle with serious versatility, then the 2020 Honda CR-V dimensions will blow you away. Not only do the CR-V interior dimensions offer…

  • Does the 2020 Honda CR-V Have AWD?

    If you’re in the market for a reliable SUV that can keep you moving and handle any surface, then the 2020 Honda CR-V is an exceptional choice. While this unique SUV comes equipped with standard 2WD capabilities, drivers can upgrade their Honda CR-V trim level with the Real Time AWD with Intelligent Control System™ for…

Posted in Finance