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Car Financing - How it Really Works Milford OH

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.

722 Redemption
(888) 721-2800
7901 Vine Street Suite 200
Cincinatti, OH
 
Fifth Third Alternative Finance
(877) 782-8102
925 Freeman Avenue MLD 009014
Cincinatti, OH
 
Fifth Third Alternative Finance
(877) 782-8102
925 Freeman Avenue MLD 009014
Cincinatti, OH
 
Security National Automotive Acceptance
(800) 995-0591
6951 Cintas Bulevard
Mason, OH
 
Central Credit Corp.
(888) 737-2622
2040 Brice Rd. Suite 200
Reynoldsburg, OH
 
Security National Automotive Acceptance
(800) 995-0591
6951 Cintas Bulevard
Mason, OH
 
AutoLoansInOhio.com
(614) 859-6196
Columbus, OH
 
MVA
(440) 746-1890
10100 Brecksville Road
Breckville Road, OH
 
722 Redemption
(888) 721-2800
7901 Vine Street Suite 200
Cincinatti, OH
 
TEBO Financial Services Inc
(330) 879-3680
4025 Erie Street S
Massillon, OH
 

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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