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Car Financing - How it Really Works Albuquerque NM

Car financing is frequently misunderstood by automotive consumers. Learn how dealer financing works, how to get approved, when to get a co-signer, and the importance of good credit.

Santa Fe, NM
(505) 299-8484
1506 Wyoming Blvd NE Ste B
Albuquerque, NM
Bank of Albuquerque Na
(505) 837-4111
Albuquerque, NM
Bank of America
(505) 282-2173
4301 Wyoming Blvd NE
Albuquerque, NM
(505) 881-2274
4701 Manual
Albuquerque, NM
Bank of America
(505) 282-2730
11201 Montgomery Blvd NE
Albuquerque, NM
Bank of America
(505) 282-2724
2011 Juan Tabo Blvd NE
Albuquerque, NM
Farm Credit of New Mexico
(505) 884-1048
3121 Carlisle Blvd NE
Albuquerque, NM
Wells Fargo Home Mortgage
(505) 298-3383
11199 Montgomery Blvd NE
Albuquerque, NM
(505) 831-7600
5303 Central Ave NW
Albuquerque, NM

Car Financing - How it Really Works

One of the most misunderstood concepts about buying or leasing a new car is how car financing really works. Dealer financing, specifically, is misunderstood.

We'll say it again later, but the key concept to understand is that car dealers do not finance car loans and leases. However, dealers can most certainly affect how you finance and what you pay for financing.

Dealers always sell for cash
Car dealers are independent business people who have an authorized franchise with one or more car manufacturers. They do not work for the manufacturer; the manufacturer does not own the dealership.

Dealers buy cars from the manufacturer, usually with large "floor-plan" loans from a bank or finance company. The bank charges dealers interest on these loans. Dealers have to sell cars to pay off these loans with associated interest, as well as cover other expenses of running a business.

When a dealer sells or leases a car, he always receives cash, whether it's directly from the customer, or from a finance company or bank who has loaned a customer the money.

A common misconception is that dealers would rather get cash directly from a customer, bypassing the financing step. Some people mistakenly believe that dealers give cash customers a discount. This is not true. In fact, dealers typically get a commission or "finders fee" on car financing provided by banks or finance companies and therefore prefer that customers finance or lease...

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