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Car Financing - How it Really Works Fort Smith AR

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.

AutoLoansInArkansas.Com
Little Rock, AR
 
First American Cash Advance
(479) 648-3885
2600 Zero St Ste B
Fort Smith, AR
 
Andy's Pawn & Gun Shop
(479) 783-3658
2113 Dodson Ave
Fort Smith, AR
 
Express Mortgage
(479) 452-8855
7613 Rogers Ave Ste D
Fort Smith, AR
 
Allied Home Mortgage Capital Corp
(479) 646-3600
2801 Old Greenwood Rd
Fort Smith, AR
 
Thrifty Car Sales
(479) 636-5050
1810 So 8Th Street (Hwy 71B)
Rogers, AR
 
Uncle John's Pawn & Loan
(479) 649-7296
5324 Towson Ave
Fort Smith, AR
 
Southern Mortgage Company of Arkansas
(479) 494-7665
4300 Rogers Ave
Fort Smith, AR
 
1st Metropolitan Mortgage
(479) 783-8188
Fort Smith, AR
 
Simmons First National Bank
(479) 646-5590
4101 Brooken Hill Dr
Fort Smith, AR
 

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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