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Car Financing - How it Really Works Meridian MS

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.

Jackson, MS
Mississippi Title Loans
(601) 482-8100
1806 N Frontage Rd
Meridian, MS
Purvis Guy Bonds
(601) 693-2791
200 22nd Ave S
Meridian, MS
Financial Management
(601) 693-1304
206 22nd Ave
Meridian, MS
Money Now Title Loan
(601) 485-3444
800 Highway 19 N Ste 355
Meridian, MS
Best Credit Corporation
(601) 483-4420
212 22nd Ave
Meridian, MS
Twin States Finance Inc
(601) 483-8170
4611 8th St
Meridian, MS
Metro Loan Corporation
(601) 693-6982
2213 8th St
Meridian, MS
Express Check Advance
(601) 483-6765
1316 25th Ave
Meridian, MS
First State Bank Loan Production Office
(601) 481-1051
2211 5th St
Meridian, MS

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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