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Car Financing - How it Really Works Stanwood 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.

Louis Auto Glass III, Inc
(360) 424-9759
1721 E College Way
Mt. Vernon, WA
 
Courtesy Auto Group
(360) 385-0145
14082 Airport Cut-off Road
Port Townsend, WA
 
Carquest Auto Parts
(509) 773-3793
614 S Columbus
Goldendale, WA
 
BMW Northwest, Inc
(253) 922-8700
4011 20th St E
Tacoma, WA
 
Phil Smart, Inc.
(206) 324-5959
600 E Pike St.
Seattle, WA
 
Dent Destroyer, Inc.
(425) 258-5412
P.O. Box 2986
Seattle, WA
 
AutoLoansInWashington.com
(360) 489-6000
Olympia, WA
 
Williams Oil Filter Service Co
(253) 627-8163
PO Box 2155
Tacoma, WA
 
Midas - Silence Inc.
(425) 424-0726
17311 135th Ave. NE, #A450
Woodinville, WA
 
Shaub-Ellison Co., Inc
(253) 272-4119
1117 Broadway Plaza Ste 500
Tacoma, 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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