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Car Financing - How it Really Works Colorado Springs CO

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.

Cycle City Auto Pawn Inc
(719) 597-9797
3345 Chelton Loop North
Colorado Springs, CO
 
Universal Special Auto Finance
303-773-44200
5690 DTC Blvd. Suite 340W
Greenwood Village, CO
 
Go Honda 104th
(303) 438-6109
2999 W 104th Avenue
Westminster , CO
 
Boulder Toyota
(303) 443-3250
2465 48th Court
Boulder , CO
 
Massa Auto Pawn
(719) 391-7296
2610 Delta Dr
Colorado Springs, CO
 
Massa Auto Pawn
(719) 391-7296
2610 Delta Dr
Colorado Springs, CO
 
AutoLoansInColorado.com
(720) 292-1226
Denver, CO
 
Pro Chrysler Jeep
(303) 469-1931
1800 West 104th Avenue
Thornton , CO
 
R.D. Motors, Inc.
(303) 232-2303
8200 W. Colfax Avenue
Lakewood , CO
 
Cycle City Auto Pawn Inc
(719) 597-9797
3345 Chelton Loop North
Colorado Springs, CO
 

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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