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Car Financing - How it Really Works Bozeman 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
Quick Check
(406) 585-3535
1230 W Main St
Bozeman, MT
Northwest Farm Credit Services
(406) 556-7300
1001 Oak St Ste 200
Bozeman, MT
Stockman Bank
(406) 556-4100
1815 S 19th Ave
Bozeman, MT
Wells Fargo Financial
(406) 586-4400
2405 W Main St
Bozeman, MT
Mile High Chrysler Jeep Dodge Kia
(406) 282-3082
3883 Harrison Avenue,
Butte, MT
Yellowstone Loan
(406) 556-1800
3508 Laramie Dr
Bozeman, MT
First Security Bank
(406) 556-6100
642 Cottonwood Rd
Bozeman, MT
Wells Fargo Bank Na
(406) 586-3839
1400 N 19th Ave
Bozeman, MT
Sterling Savings Bank
(406) 586-2309
5 W Mendenhall St
Bozeman, 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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