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Car Financing - How it Really Works Maryville 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.

Auto Credit of Nashville
(615) 865-1300
162 Cude Ln
Madison, TN
(423) 954-0066
Chattanooga, TN
Tennessee Auto Finance
(615) 953-9595
424 Church Street
Nashville, TN
Alcoa Tenn Federal Credit Union
(865) 977-1112
425 Foothills Mall Dr
Maryville, TN
Classic Credit Co
(865) 983-9919
612 W Lamar Alexander Pkwy
Maryville, TN
Community Choice Financial
(615) 370-5401
5200 Maryland Way Suite 310
Brentwood, TN
Financial Solutions (Bulk Purchase)
(615) 414-6708
2446 Durham Manor Dr
Franklin, TN
First Tennessee Home Loans
(865) 977-5367
101 W Broadway Ave
Maryville, TN
Cash Express
(865) 380-9299
313 Whitecrest Dr
Maryville, TN
Farm Credit Services
(865) 983-4320
Maryville, 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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