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Car Financing - How it Really Works Anchorage AK

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.

Juneau, AK
Denali Alaskan Federal Credit Union
(907) 257-7283
Anchorage, AK
Alaska First Community Bank & Trust
(907) 929-9236
Anchorage, AK
Moneyworks Inc
(907) 337-2274
401 E Northern Lights Blvd
Anchorage, AK
Denali Alaskan Federal Credit Union
(907) 257-7283
440 E 36th Ave
Anchorage, AK
American Home Mortgage
(907) 277-6333
1400 W Benson Blvd Ste 315
Anchorage, AK
Wells Fargo Financial
(907) 272-6594
713 Northway Dr
Anchorage, AK
Homestate Mortgage Co Llc
(907) 762-5890
3801 Centerpoint Dr Ste 100
Anchorage, AK
Primary Residential Mortgage
(907) 929-5626
510 W Tudor Rd
Anchorage, AK
Alaska USA Mortgage Company
(907) 563-3033
500 W 36th Ave Ste 110
Anchorage, AK

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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