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Car Financing - How it Really Works Zeeland MI

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.

Reliable Auto Finance
(800) 373-9933
950 28 th Street SW Suite C PO Box 9700
Grand Rapids, MI
Automotive Credit Corporation
(800) 810-2202
26250 Northwestern Highway
Southfield, MI
Reliable Auto Finance
(800) 373-9933
950 28 th Street SW Suite C PO Box 9700
Grand Rapids, MI
Sawyers Chevrolet
(888) 462-3823
13200 Old US 27 South
DeWitt , MI
Wolverine Auto Finance
(248) 688-0171
100 West Big Beaver Road
Troy, MI
(517) 580-0383
Lansing, MI
Lender To Lender Financing LLC
(586) 598-1634
27322 23 Mile Road Suite 5
Chesterfield, MI
Cars Trucks & More Inc
(518) 547-7000
861 E. Grand River
Howell, MI
JD Byrider
(231) 932-7905
1661 South Garfiled Avenue
Traverse City, MI
MichianaPreApproval LLC
(574) 370-1403
18711 Whispering Pines
White Pigeon, MI

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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