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Car Financing - How it Really Works Merrimack NH

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.
(603) 513-0385
Concord, NH
Equity One Consumer Loan Co Inc
(603) 880-0102
30 Daniel Webster Hwy Ste 3
Merrimack, NH
Spanos Appraisal Services
(603) 421-9200
Derry, NH
Advance America Cash Advance
(603) 750-7106
110 Tri City Plz
Somersworth, NH
First Horizon Home Loans
(603) 421-0009
25 Indian Rock Rd Ste 3
Windham, NH
Lewis Motor Sales Of Brentwood
(603) 347-5140
317 South Rd
Brentwood, NH
Gh Lending Services
(603) 685-0030
59 Stiles Rd
Salem, NH
Granite State Economic Def Inc
(603) 436-0009
1 Cate St
Portsmouth, NH
Passumpsic Savings Bank
(603) 444-1730
Littleton, NH
United Auto Credit Corp
(603) 434-0765
50 Nashua Rd
Londonderry, NH

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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