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Car Financing - How it Really Works Hopkinsville KY

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.

Frankfort, KY
Signature Motors
(270) 678-5700
1419 happy Valley Rd.
Glasgow, KY
Lendmark Financial Services
(270) 885-6962
2520 Fort Campbell Blvd
Hopkinsville, KY
Homeplace Mortgage Inc
(270) 885-2525
4237 Fort Campbell Blvd
Hopkinsville, KY
Ace Mortgage Funding Inc
(270) 886-6385
Hopkinsville, KY
the car store
(812) 987-4041
6801 preston hwy
louisville, KY
Area Finance
(270) 885-0686
1007 S Virginia St
Hopkinsville, KY
Farm Credit Services of Mid-America
(270) 886-5421
3205 Eagle Way Byp
Hopkinsville, KY
World Finance Corp
(270) 885-8100
1215 Skyline Dr
Hopkinsville, KY
Cash Express
(270) 886-8447
2514 Fort Campbell Blvd
Hopkinsville, KY

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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