What Finance Company Do You Work With?
It is important to know which bank is going to offer you financing if you need a loan to buy your next car. This is because not all lenders offer the same rates or the same level of customer service. While it is easy to get a loan if you have good credit, your lending options may be limited if you have a poor credit score or a recent black mark on your credit report.
Try to Find a Lender That You Have Used Before
It may be easiest for a borrower to work with a lender that he or she has worked with in the past. This is because that person already has a track record with the lender that can be used as leverage to get a better rate or to qualify for the loan at all. On the other hand, if you have had a bad experience with a particular lender, you can also ask to have that particular lender removed as an option for financing.
Look for Reputable Lenders
Just because a dealer works with a certain lender does not mean that the lender is reputable. It is possible that a particular lender has partnered with a dealership because it offers kickbacks or other incentives for the dealer to send as many loans as possible to that lender. Therefore, you should attempt to get a loan only through a lender that you have heard about in the past or have heard good things about.
Can You Work With a Credit Union Instead of a Bank?
It may be possible to work with a credit union instead of a bank to get financed for a car loan. If the dealer doesn’t work with a credit union, you may be able to apply for financing before you come to the dealership ready to make a deal. In many cases, smaller banks will offer better rates and loan terms to those who don’t have elite credit as a method of attracting new customers.
Dealer Lenders Aren’t Always Bad
A dealer that does its own loans could be one worth shopping at. If you have bad credit, you may not be able to get a loan through a traditional lender while getting a loan through a bad credit lender could make it too expensive to get financing. However, a dealer that also acts as a lender has the incentive to offer you a deal that you can afford. For those who have good credit, working with a dealer lender could make it possible to get a loan with zero percent interest or other favorable terms.
Where you get financed is one of the most important decisions that you can make when buying a car. Whether you decide to get financing before you go to the dealer, work with a dealer lender or work with a lender that the dealer has partnered with, you should always consider all of your options before settling on financing.