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Car Financing - How it Really Works Nottingham MD

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.

Friendly Finance
(800) 872-2877
6340 Security Bulevard Suite 200
Baltimore, MD
Friendly Finance
(800) 872-2877
6340 Security Bulevard Suite 200
Baltimore, MD
Bank of America
(410) 882-5040
7912 Belair Rd
Nottingham, MD
Mercantile Peninsula Bank
(410) 543-1505
Nanticoke Rd
Salisbury, MD
Famous Pawnbrokers
(301) 773-8000
7509 Landover Rd
Hyattsville, MD
(410) 571-4914
Annapolis, MD
Baltimore County Savings Bank Fsb
(410) 256-5000
4111 E Joppa Rd Ste 300
Nottingham, MD
American General Financial Services
(301) 705-7564
2110 Crain Hwy
Waldorf, MD
First County Mortgage
(301) 862-1148
22789 Three Notch Rd
California, MD
Bank of America
(410) 644-7176
3215 Washington Blvd
Baltimore, MD

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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