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Car Financing - How it Really Works Pierre SD

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.

Sioux Falls, SD
First National Bank
(605) 945-3900
Pierre, SD
Strategic Mortgage Solutions
(605) 224-0414
1217 E Wells Ave
Pierre, SD
Direct Check Inc
(605) 224-6044
633 E Souix Ave
Pierre, SD
Surety Finance
(605) 945-1187
350 S Pierre St
Pierre, SD
Home Federal Bank
(605) 224-5817
322 Coteau St
Pierre, SD
Money $Tation
(605) 224-1380
1009 E Wells Ave
Pierre, SD
First National Bank
(605) 945-3900
125 E Sioux Ave
Pierre, SD
Check 'n Go #2753
(605) 224-0553
1309 E Wells Ave
Pierre, SD
Advance America Cash Advance
(605) 224-6700
840 Garfield
Pierre, SD

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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