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Car Financing - How it Really Works Texarkana AR

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.

Little Rock, AR
Mil-Way Federal Credit Union
(870) 772-0661
2000 Arkansas Blvd
Texarkana, AR
Regions Bank
(870) 779-4635
2800 N State Line Ave
Texarkana, AR
Farm Credit Services of Western Arkansas
(870) 772-1882
2805 E Broad St
Texarkana, AR
Cash Express
(870) 773-1953
Texarkana, AR
Thrifty Car Sales
(479) 636-5050
1810 So 8Th Street (Hwy 71B)
Rogers, AR
Regions Mortgage
(870) 779-4663
300 Olive St
Texarkana, AR
(870) 773-1103
3rd & Olive
Texarkana, AR
Cash Express
(870) 773-1948
1209 E 35th St
Texarkana, AR
Farm Credit Services Rural Homes
(870) 774-8222
2805 E Broad St
Texarkana, AR

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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