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Car Financing - How it Really Works Farmington NM

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.

AutoLoansInNewMexico.Com
Santa Fe, NM
 
Continental Loans
(505) 326-7500
1903 E 20th St
Farmington, NM
 
Wells Fargo Financial
(505) 325-1866
3501 E Main St
Farmington, NM
 
Midtown Credit
(505) 325-8900
310 W Main St
Farmington, NM
 
Gold Star Finance
(505) 564-3229
801 W Main St
Farmington, NM
 
Your Credit Inc
(505) 326-0490
401 W Main St
Farmington, NM
 
Advance Funding Inc.
(505) 564-2500
409 W Main St
Farmington, NM
 
Loanmax
(505) 327-2229
4315 E Main St
Farmington, NM
 
New Mexico Title Loans
(505) 324-6315
2404 W Main St
Farmington, NM
 
Speedy Loan
(505) 327-3948
201 W Main St
Farmington, NM
 

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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