Going For Car Dealership Financing May Not Be Your Best Choice When Shopping For a New Ride
Going to a car dealer to buy and finance a car’s purchase may seem like a good idea at first. After all, getting two things done in one trip can save one time when it comes to car shopping. However, this convenience also comes with some drawbacks. Here are five reasons why buyers should avoid car dealership financing.
Since in this setup the dealer is the one directly negotiating the loans, they may only present a client with the ones they’ve pre-picked. These deals may not be the best ones for the buyer in the end and they may benefit more by researching for better deals themselves and see which ones they’re eligible for. After all, a dealer may also be looking to profit from the transaction.
Higher Monthly Payments
In a way, a car dealer can act as a middle man for the customer and a lending institution. Thus, the rates that they may be able to present to potential car buyers may be higher than what the latter can get when they seek for a loan themselves.
This commission is also referred to as the ‘finance reserve’ and may also cause an increase in one’s monthly car payments in the future. However, it’s also worth noting that a borrower’s credit score may also play a vital role in the interest rate they will end up getting.
Pressure to Decide
It’s also important to remember that a buyer and a dealer may have ‘competing interests’. The dealer will likely be wanting their client to spend more while the latter is looking to do the opposite. This said a car salesperson is likely to put some pressure on their client to make a decision on the spot to secure a deal fast.
Missing Banking Perks
Opening multiple types of accounts in one bank can lead to some rewarding perks for a client. What more, banking with a credit union can actually get a person lower interest rates than one would get at traditional banks. In the end, choosing to finance a car purchase this way could give one better savings than settling with a loan pre-selected by a car dealership.
Less Focus on the Car
Borrowing to buy a car at a dealership, means a buyer is making two purchases at the same time. Thus, rolling these two transactions in one place can lead a buyer to miss vital details. Choosing to settle a car loan before going to the lot will enable a buyer to focus more on choosing the model they want instead of worrying about peripheral concerns.
More inFinancial Advisor
Obama, Julia Roberts, Madonna and More Celebrities Who Have Partied on David Geffen’s $590 Million Yacht
Billionaires love showing off their wealth whether it’s through their massive private jets, a fleet of expensive cars or mega yachts....April 9, 2020
Kim Kardashian Sued for $300-Million Over Kimoji App, But the Case Could Go in Her Favor
Kim Kardashian has always found herself at the center of controversies. From her hairstyles to outfits, she manages to create headlines...April 9, 2020
These Five Things Can Help You Boost Your Credit Score—And You’re Probably Already Doing Them
Maintaining a high credit score comes with a lot of financial perks. For one, it can save people plenty of money...April 8, 2020
The Ritz-Carlton Is Woking on a Yacht Cruise Ship Designed For Luxury Travelers–This Is How It Turned Out
Known for its luxury hotels and resorts found across the globe, the Ritz-Carlton Hotel Company is now planning to expand its...April 8, 2020
Drag Superstar RuPaul Charles Just Bought a Beverly Hills Mansion That Totally Matches His Over-The-Top Public Persona
RuPaul Charles better known by the mononym ‘RuPaul’ is probably the most famous drag queens to ever successfully cross over into...April 8, 2020
This is The Unbelievable Story Behind Former WeWork CEO Adam Neumann’s Plummeting Net Worth
Just a few months ago, Adam Neumann was on top of the world. Not only was he a billionaire with an...April 7, 2020
This Is How Young Working People Can Start Preparing For Retirement While Still Enjoying Their 20s
Saving for retirement and enjoying the fruits of one’s labor are not mutually exclusive concepts. Members of the workforce, young ones...April 7, 2020
Tom Cruise Was Offered Roles in These Blockbuster Films But He Turned Them Down!
Tom Cruise is undoubtedly one of the most renowned faces and the greatest talents in the industry – you can tell that by the...April 7, 2020
These Five Major Cities Are Joining The Car-Free Movement & Banning Cars On Their Streets Soon
There’s no doubt that cars are a very useful invention. However, the rapidly growing number of vehicles on the world’s streets have...April 7, 2020