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Car Financing - How it Really Works North Charleston SC

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.
(803) 369-8110
Columbia, SC
Cash Country
(843) 747-3687
6050 Rivers Ave
North Charleston, SC
Regions Bank
(843) 797-3158
2210 Ashley Phosphate Rd
North Charleston, SC
Cash N Advance
(843) 760-9120
5093 Dorchester Rd
North Charleston, SC
Cash American Pawn
(843) 553-1966
8530 Rivers Ave
North Charleston, SC
American Credit Acceptance
(866) 441-0251
340 East Main Street Suite 500
Spartanburg, SC
First American Cash Advance
(843) 740-5450
5710 Rivers Ave Ste 105
North Charleston, SC
Check 'n Go
(843) 553-8989
8316 Rivers Ave Ste B
North Charleston, SC
Magnolia Credit
(843) 747-4001
5900 Rivers Ave Unit X
North Charleston, SC
Gene's Payday Advance
(843) 225-2535
5818 Rivers Ave
North Charleston, SC

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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