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Car Financing - How it Really Works Kapaa 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
 
Kahi Mohala Behavioral Healthcare
(808) 677-7600
91-2301 Fort Weaver Rd
Ewa Beach, HI
 
Wells Fargo Financial
(808) 262-6584
26 Hoolai St
Kailua, HI
 
Pay Day Hawaii
(808) 247-7171
46-056 Kamehameha Hwy
Kaneohe, HI
 
Creative Financial
(808) 891-9292
320 Ohukai Rd Ste 413
Kihei, HI
 
Gateway Financial Services
(808) 242-5463
24 N Church St Ste 312
Wailuku, HI
 
American General Financial Services Of Hawaii Inc
(808) 326-2626
75-5737 Kuakini Hwy Ste 104
Kailua Kona, HI
 
Colortyme Rent-To-Own
(808) 668-7070
87-2070 Farrington Hwy Ste E3
Waianae, HI
 
CitiFinancial
(808) 625-0422
95-1249 Meheula Pkwy Ste 124
Mililani, HI
 
Wells Fargo Financial
(808) 455-5234
719 Kamehameha Hwy Ste C300
Pearl City, 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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