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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
Crazy Sam's Car Title Loans
(505) 397-5153
101 W Broadway St
Hobbs, NM
(505) 299-8789
11500 Menaul Blvd NE
Albuquerque, NM
Liquid Cash Advance
(505) 858-3200
7001 San Antonio Dr NE
Albuquerque, NM
Liberty Finance Co
(505) 439-5200
622 10th St
Alamogordo, NM
Santa Fe, NM
Title Cash of New Mexico Inc
(505) 627-9090
2901 N Main St Ste C
Roswell, NM
Bank of America
(505) 282-3030
6605 Uptown Blvd NE
Albuquerque, NM
Bank of Albuquerque Na
(505) 222-8469
Albuquerque, NM
Wells Fargo Home Mortgage
(505) 830-2119
6000 Menaul Blvd NE
Albuquerque, 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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