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Car Financing - How it Really Works Los Alamos 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
Sun Loan Company
(505) 722-4970
1622 E Historic Highway 66
Gallup, NM
Security Finance
(505) 461-2791
120 E Main St
Tucumcari, NM
Vectra Bank Colorado-Farmington
(505) 326-4341
2000 E 20th St
Farmington, NM
Speedy Loan
(505) 899-4050
6200 Coors Blvd NW
Albuquerque, NM
Santa Fe, NM
Bank of the West
(505) 255-8309
1422 Carlisle Blvd NE
Albuquerque, NM
Bank of America
(505) 345-2693
6603 4th St NW
Albuquerque, NM
Bank of the West
(505) 877-5112
3733 Isleta Blvd SW
Albuquerque, NM
Security Finance Corporation
(505) 832-6437
704 Central Ave
Moriarty, 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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