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Car Financing - How it Really Works Georgetown SC

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.

American Credit Acceptance
(866) 441-0251
340 East Main Street Suite 500
Spartanburg, SC
Spot Car Title Loans III
(843) 520-0494
2511 Highmarket St
Georgetown, SC
(843) 527-4800
1331 Church St Ste B
Georgetown, SC
First American Cash Advance
(843) 527-2272
1370 N Fraser St
Georgetown, SC
National Finance Corp
(843) 546-5951
1424 Duke St
Georgetown, SC
(803) 369-8110
Columbia, SC
First Citizens
(843) 546-8591
726 Front St
Georgetown, SC
World Finance Corporation
(843) 546-8551
1105 Front St
Georgetown, SC
(843) 546-3400
1331 Church St Ste A
Georgetown, SC
Bank of America
(843) 546-8000
1306 Highmarket St
Georgetown, SC

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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