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Car Financing - How it Really Works La Follette TN

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.

AutoLoansInTennessee.com
(423) 954-0066
Chattanooga, TN
 
Financial Solutions (Bulk Purchase)
(615) 414-6708
2446 Durham Manor Dr
Franklin, TN
 
Tennessee Auto Finance
(615) 953-9595
424 Church Street
Nashville, TN
 
Beacon Finance Corp
(423) 566-4634
171 N Tennessee Ave
La Follette, TN
 
World Finance Corp
(423) 566-6657
240 W Central Ave
La Follette, TN
 
Community Choice Financial
(615) 370-5401
5200 Maryland Way Suite 310
Brentwood, TN
 
Auto Credit of Nashville
(615) 865-1300
162 Cude Ln
Madison, TN
 
Covington Credit
(423) 566-9821
1907 Old Jacksboro Hwy
La Follette, TN
 
Service Loan Company
(423) 562-1600
102 N Massachusetts Ave
La Follette, TN
 
Younce Kent
(423) 562-5650
175 N Tennessee Ave
La Follette, TN
 

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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