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Car Financing - How it Really Works Anacortes WA

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.

Louis Auto Glass III, Inc
(360) 424-9759
1721 E College Way
Mt. Vernon, WA
 
Felton’s Auto Repair
(360) 856-2866
1419-A E. State Street
Sedro-Woolley, WA
 
SR 20 Motorsports LLC
(360) 854-7720
1152 State Route 20
Sedro-Woolley, WA
 
Countryside Chevrolet GEO
(360) 855-0321
221 Woodworth St
Sedro-Woolley, WA
 
Vollans Automotive Inc
(360) 855-1111
487 Metcalf St
Sedro-Woolley, WA
 
Truck Toys Inc
(360) 855-9700
222 Metcalf St
Sedro-Woolley, WA
 
Puget Sound Automotive
(360) 855-2059
304 State St
Sedro-Woolley, WA
 
Sedro-Woolley Auto Parts Inc
(360) 855-0341
816 Murdock Street
Sedro-Woolley, WA
 
Sanford Tire & Auto Repair
(360) 856-6301
1288 W SR 20
Sedro-Woolley, WA
 
Vern Sims
(360) 855-9730
23245 Basset Rd
Sedro-Woolley, WA
 

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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