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Car Financing - How it Really Works Billings MT

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.

Helena, MT
Tiki Hut Title Loan
(406) 248-5626
1041 Broadwater Ave
Billings, MT
First Interstate Bank
(406) 255-5060
Billings, MT
Wells Fargo Home Mortgage
(406) 652-5249
2044 Broadwater Ave
Billings, MT
Household Finance
(406) 651-0100
2564 King Ave W
Billings, MT
Mile High Chrysler Jeep Dodge Kia
(406) 282-3082
3883 Harrison Avenue,
Butte, MT
Summit Credit Union
(406) 294-3060
895 Main St
Billings, MT
Kwik Cash Loans
(406) 651-9100
2500 Grand Ave Ste H
Billings, MT
Premier Mortgage of Billings
(406) 652-9600
1844 Broadwater Ave Ste 5
Billings, MT
Citifinancial Auto Services
(406) 652-3843
2044 Broadwater Ave
Billings, MT

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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