The main reason why dealerships are not a good place for seeking finance is the fact that dealership’s car loans are predefined and won’t adjust to your needs. Moreover, the costs of loans closed on dealerships are significantly higher and dealers will urge you to sign due to the fact that they are eager to sell but also because they benefit from the loan too.
Lack Of Flexibility
Dealerships lack the ability to tailor a loan specially for the consumer’s needs. They have predefined car loans that should fit the average consumer but can sometimes not match the needs of particular borrowers that may require longer or shorter repayment programs, higher or lower monthly payments, higher loan amounts, etc.
Dealerships lack the flexibility that is needed to successfully customize a loan to suit the needs and desires of customers thus providing solutions to their finance needs. Instead, they provide loans specifically made to meet the dealership needs and to purchase the car knowing that the applicant will be the one that will have to be flexible and often make sacrifices in order to afford the loan payments.
Higher Costs Of Financing
The dealership is an intermediary between the lender and the borrower and thus, adds costs to the lending chain. Moreover, the dealership usually charges the lender a commission for any deal closed and the lender will include this on the loans costs so the one who will end up paying for it is undoubtedly, the borrower.
Also, dealerships tend to offer loans for car purchases with comparatively worse terms. For starters, the interest rate charged for car loans on dealerships is significantly higher than the rate charged at banks and financial institutions. If you have bad credit, you’ll only get finance from a dealership with some luck, but you’ll have to face incredibly high rates. Instead, on some non traditional financial institutions on the loan market, you’ll be able to find bad credit car loans with very competitive interest rates.
With a dealership, you may have to forget about getting a particular car of your choice because they can’t secure you a particular loan amount so as to get the car you want. But with regular car loan financing and non traditional car loan financing you can obtain higher loan amounts without difficulties since the loans are guaranteed with the car that is worth the money borrowed.
Finally, if you decide to finance with a dealership, chances are that you’ll have to make sacrifices in order to face the monthly payments on your car loan. With regular car loans and non traditional financial institutions’ car loans (if you have bad credit) you can get more flexible repayment programs and thus, lower monthly payments so as to suit your needs. You’ll be able to afford the loan’s installments without having to resign other expenses.
Mary Wise, a professional consultant at Badcreditloanservices.com with twenty years in the financial field, prevents consumers from falling into the hands of fraudulent lenders. In her website you will find more useful tips and interesting financial articles on this and many other related topics.