Reader question:
I’m going to get a new car. How do I decide if I should get it financed through the dealer or through a bank or whatever?
Brandy
That can be a difficult decision.
A lot of people will go with whatever the dealer offers them because they don’t realize that they can secure financing for buying a new car on their own. I’m glad, then, that you are aware of this, Brandy, because it makes things easier. It’s also the case that when people do know all the ways they can go, they make their decision based on surface reasons, like rebates, without looking at the microscopic print. There’s often more to a financing contract than the great deal offered in big letters up front.
Lower interest rates on a financing deal are very pretty, but you need to take the glitter out of your eyes and really look at the whole picture before you let that overwhelm. The same goes for rebates. To figure out if you’re actually getting a good deal, take two options for financing and then divide the amount of the loan in half and multiply that amount by the financing rates. You might not have to make these comparisons if you have great credit, because you can usually get enough great deals to not need to compare so much.
If you want to finance a car, shop around before you even make the decision between independent financer and dealer. There are plenty of internet lenders as well as banks and credit unions that can help you out. If you want a base suggestion, though, dealers usually cost more than bankers and you can usually get a better price by looking elsewhere.
Cheers,
Fashun Guadarrama.