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Car Financing - How it Really Works Bismarck ND

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.

First Community Credit Union
(701) 224-1511
2717 Rock Island Pl
Bismarck, ND
Student Loans of North Dakota
(701) 328-5660
Bismarck, ND
(701) 250-8888
1010 S 12th St
Bismarck, ND
Kirkwood Bank & Trust Co
(701) 258-6550
905 Tacoma Ave
Bismarck, ND
Dakota Community Bank Bismarck
(701) 255-6500
Bismarck, ND
Heartland Mortgage Company
(701) 355-4663
416 E Main Ave
Bismarck, ND
Mortgage Max Inc
(701) 255-0295
120 N 3rd St
Bismarck, ND
G & J Financial Inc
(701) 250-1812
233 W Broadway Ave
Bismarck, ND
First Community Credit Union
(701) 355-4581
3201 Weiss Ave
Bismarck, ND
Wells Fargo Bank Na
(701) 222-5541
1050 E Interstate Ave
Bismarck, ND

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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