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Car Financing - How it Really Works Gallup 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.

Santa Fe, NM
Star Loans of New Mexico
(505) 726-0170
3312 E Historic Highway 66
Gallup, NM
S-W Tax Loans
(505) 863-2323
1100 Highway 491
Gallup, NM
Pyramid Capital Management
(505) 722-9700
510 N 3rd St
Gallup, NM
(505) 722-5306
1746 W Maloney Ave
Gallup, NM
First Payday Loans
(505) 863-4300
3314 E Historic Highway 66
Gallup, NM
E-Z Loan
(505) 863-4336
1721 S 2nd St
Gallup, NM
Your Credit Inc
(505) 863-5100
824 Highway 491
Gallup, NM
Wells Fargo Financial
(505) 863-3881
915 Metro Ave
Gallup, NM
Piggy Bank Loan Company
(505) 722-7444
606 W Aztec Ave
Gallup, 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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