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Car Financing - How it Really Works Cumberland RI

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.

Providence, RI
Providence, RI
Check 'n Go
(401) 732-2251
1565 Post Rd
Warwick, RI
Aames Home Loan
(401) 739-1852
931 Jefferson Blvd
Warwick, RI
Capital Mortgage Corp
(401) 884-1860
4512 Post Rd
East Greenwich, RI
state cap auto finace,llc
(508) 916-0427
1018 sate rd
westport, MA
(401) 725-0600
391 Mendon Rd
Cumberland, RI
AAA Acceptance Corp
(401) 723-9100
245 Manton St
Pawtucket, RI
Providence Equity Partners
(401) 751-1700
50 Kennedy Plz Ste 1800
Providence, RI
Wells Fargo Home Mortgage
(401) 943-4630
201 Hillside Rd
Cranston, RI

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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