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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
USA Title Loans
(505) 524-7900
1512 E Lohman Ave
Las Cruces, NM
Bank of the West
(505) 532-1889
795 S Telshor Blvd
Las Cruces, NM
Speedy Loan
(505) 527-0399
742 E Lohman Ave
Las Cruces, NM
Advance America Cash Advance
(505) 524-5829
2132 N Main St
Las Cruces, NM
Wells Fargo Financial
(505) 521-7062
141 S Roadrunner Pkwy
Las Cruces, NM
(505) 522-0058
400 N Telshor Blvd Ste B
Las Cruces, NM
New Mexico Title Loans
(505) 541-4070
1590 E Lohman Ave
Las Cruces, NM
Bank of the Rio Grande N.A.
(505) 525-8900
421 N Water St
Las Cruces, NM
Noble Finance Corp
(505) 524-2900
1247 El Paseo Rd
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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