Auto Financing Options

When you finance a vehicle, you have several options from which to choose. Learn more about each option to decide which is best for you here.

Dealership Financing

The overwhelming majority of car buyers finance their vehicle through the dealership. Many consumers are attracted to the one-stop-shopping appeal of buying and financing a car all at the same time. Although this can save you time, it will not save you money. In fact, dealership financing is commonly the most expensive type of vehicle financing. This is because dealers partner with banks to deliver auto loans to their buyers. The dealer then inflates the interest rate offered by the bank to make a profit. As a result, dealers routinely make more money on the financing of the vehicle than the sale. In addition, dealers cannot offer you online auto loan approval, so you will have to complete the transaction at the physical site of the dealership. For most buyers, online auto loan approval can offer the same level of convenience as dealership financing with substantially lower interest rates.

Independent Financing

Independent auto financing, also called third-party financing, basically refers to any vehicle loan that is obtained outside of the dealership. Our lenders all offer independent financing and online auto loan approval. With independent financing, you will get the lowest interest rates possible because you are getting the loan directly from the source instead of adding in a dealer middleman. Your bank or credit union can also offer independent financing, but they usually cannot offer online auto loan approval. In other words, you will still need to visit the bank or credit union to get your loan. This can take a great deal of time, especially if you apply with more than one bank. With online auto loan approval, you can get up to five offers from lenders simultaneously without having to leave your home.

Home Equity Financing

Some car buyers choose to use the equity in their homes to finance their new vehicle. Home equity refers to the difference between the appraised value of your home and the outstanding balance on your mortgage. You then use this equity to take out a loan to finance your new vehicle. Home equity loans can offer rates similar to those offered by lenders with online auto loan approval, but home equity financing is much riskier. Keep in mind that if you finance your vehicle with this type of loan, you could lose your home if you fall behind on payments. If you have any questions, please visit our FAQ page.