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Car Financing - How it Really Works Hilo HI

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.

AutoLoansInHawaii.com
(808) 756-9311
Hilo, HI
 
Thrivent financial
(808) 262-0070
354 Uluniu St Ste 310
Kailua, HI
 
Maui Financial
(808) 879-4666
2439 S Kihei Rd Ste 204a
Kihei, HI
 
Honolulu Federal Credit Union
(808) 687-8565
1001 Kamokila Blvd Ste 104
Kapolei, HI
 
Cash Advantedge
(808) 235-0014
45-480 Kaneohe Bay Dr
Kaneohe, HI
 
AutoLoansInHawaii.com
(808) 756-9311
Hilo, HI
 
Citifinancial
(808) 235-0006
45-1117 Kamehameha Hwy Ste 103
Kaneohe, HI
 
Hawaiiusa Federal Credit Union
(808) 625-5999
Mililani Shopping Ctr
Mililani, HI
 
Allstate Insurance Company - Daniel Dennis
(808) 626-2788
95-1095 Ainamakua Dr
Mililani, HI
 
American Express
(808) 585-3200
677 Ala Moana Ste 100
Wailuku, HI
 

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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