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Car Financing - How it Really Works Pikeville KY

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.

Frankfort, KY
the car store
(812) 987-4041
6801 preston hwy
louisville, KY
(606) 437-7306
137 Weddington Branch Rd
Pikeville, KY
(606) 432-4411
4414 N Mayo Trl
Pikeville, KY
Inez Deposit Bank Loan Production Office
(606) 433-0996
3780 N Mayo Trl
Pikeville, KY
Signature Motors
(270) 678-5700
1419 happy Valley Rd.
Glasgow, KY
First Financial Credit of Pikeville
(606) 437-0412
404 S Mayo Trl
Pikeville, KY
Citizens National Bank
(606) 432-7188
4367 N Mayo Trl
Pikeville, KY
(606) 437-4015
150 S Mayo Trl
Pikeville, KY
Eastern Telephone Credit Corp
(606) 478-9109
11154 US Highway 23 S
Betsy Layne, KY

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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