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Car Financing - How it Really Works Richland WA

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.

AutoLoansInWashington.com
(360) 489-6000
Olympia, WA
 
Brown's Tire Co.
(509) 882-1262
812 W. Wine Country Rd
Grandview, WA
 
Herb’s Chevron
(360) 855-9907
PO BOX 425
Sedro-Woolley, WA
 
Thoroughbred Collision Centers
(253) 473-2888
4112 S Washington St
Tacoma, WA
 
Stroud's Auto Rebuild, Inc
(253) 474-0709
3833 S Tacoma Way
Tacoma, WA
 
Joe's Towing
(509) 773-3888
11 Commerce Rd
Goldendale, WA
 
Firestone Complete Auto Care
(253) 471-8473
4502 S Steele St Ste 211
Tacoma, WA
 
Les Schwab Tire Center
(509) 773-5000
606 East Broadway
Goldendale, WA
 
Meridian Collision Center, Inc.
(253) 848-2364
15724 Meridian E
Seattle, WA
 
Sanford Tire & Auto Repair
(360) 856-6301
1288 W SR 20
Sedro-Woolley, WA
 

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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