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Car Financing - How it Really Works Butte 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.

Mile High Chrysler Jeep Dodge Kia
(406) 282-3082
3883 Harrison Avenue,
Butte, MT
Mile High Chrysler Jeep Dodge Kia
(406) 282-3082
3883 Harrison Avenue,
Butte, MT
National Quick Cash
(406) 782-2527
1941 Harrison Ave
Butte, MT
Quik Check
(406) 723-2200
1865 Harrison Ave
Butte, MT
Wells Fargo Financial
(406) 494-1701
3334 Harrison Ave
Butte, MT
Helena, MT
(406) 494-7667
29 Discovery Dr
Butte, MT
Advance America Cash Advance
(406) 782-8800
1315 Harrison Ave
Butte, MT
Montana Title Loans
(406) 723-9131
2084 Harrison Ave
Butte, MT
Wells Fargo Home Mortgage
(406) 494-1834
3650 Harrison Ave
Butte, 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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