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Car Financing - How it Really Works Aztec 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.

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Santa Fe, NM
 
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(505) 334-5995
Aztec, NM
 
1st USA Title Loans of New Mexico
(505) 391-7979
1003 S Marland Blvd
Hobbs, NM
 
Nationwide Budget Finance
(505) 564-9577
632 W Main St
Farmington, NM
 
Rio Grande Credit Union
(505) 262-1401
1401 San Pedro Dr NE
Albuquerque, NM
 
Mega Loans
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505 NE Aztec Blvd
Aztec, NM
 
World Finance Corp
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1008 Paseo Del Pueblo Sur
Taos, NM
 
Southwest Financial Services of San Dias
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2626 San Pedro Dr NE
Albuquerque, NM
 
Cannon Federal Credit Union Branch
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102 E Argentia Ave
Cannon AFB, NM
 
First Community Bank
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600 W San Mateo Rd
Santa Fe, 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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