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Car Financing - How it Really Works Las Cruces NM

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.

Santa Fe, NM
Noble Finance Corp
(505) 524-2900
1247 El Paseo Rd
Las Cruces, NM
Citizens Bank of Las Cruces
(505) 647-4100
Las Cruces, NM
Cash Store the
(505) 524-3000
550 Walton Blvd
Las Cruces, NM
Manning John K & Associates
(505) 527-0688
1065 S Main St Ste G
Las Cruces, NM
Advance America Cash Advance
(505) 524-5829
2132 N Main St
Las Cruces, NM
Production Credit Assn of Southern New Mexico
(505) 528-7100
Las Cruces, NM
Security Finance
(505) 541-8908
2138 N Main St Ste B
Las Cruces, NM
Check 'n Go
(505) 522-6200
400 N Telshor Blvd
Las Cruces, NM
Farm Credit of New Mexico
(505) 528-7100
2800 Las Vegas Ct
Las Cruces, NM

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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