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Car Financing - How it Really Works Pontotoc MS

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.

Jackson, MS
Pontotoc Title Loans
(662) 488-8575
291 W Oxford St
Pontotoc, MS
Ez Cash
(662) 488-9944
230 Highway 15 N
Pontotoc, MS
Peoples Finance Co of Pontotoc
(662) 489-1215
333 W Reynolds St
Pontotoc, MS
Express Check Advance
(601) 735-0121
1316 Azalea Dr
Waynesboro, MS
R & R Financial Services
(662) 489-3040
284 W Oxford St
Pontotoc, MS
First Trust Loans of Pontotoc
(662) 489-2866
2245 Highway 15 N
Pontotoc, MS
Downtown Finance
(662) 489-8822
270D W Oxford St
Pontotoc, MS
Check Into Cash
(228) 896-6911
1315 E Pass Rd
Gulfport, MS
First Heritage Credit
(601) 656-0403
140 Canal Pl
Philadelphia, MS

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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