Financing Your Car Through the Bank vs. DealershipMay 17th, 2021
Will you need financing for your new Honda? While you might be able to borrow the money from your bank, your dealership can also offer you financing options. With that said, many future car owners struggle to decide which option is best for them. Each has its own benefits and drawbacks, and here we’ll outline which method would be the most beneficial for you.
Financing Through the Bank
The biggest advantage of using the bank for your car loan is that it’s convenient. You already have a relationship and established credit with them, so you might be able to obtain lower rates and more affordable payments. However, banks have strict approval guidelines and if your credit rating is too low, you have a number of outstanding debts or previous bankruptcy, the chances of your request being approved are low. Another drawback of obtaining financing through the bank is that they can only off you a loan from their own institution. If there are better rates and terms at another bank or lender, they won’t be the first to tell you.
Financing Through Your Dealership
Getting financing through your dealership can also be convenient as you can do the purchase and financing all in one location. The dealership is also more flexible when it comes to credit, income, and debt qualifications. If you have damaged credit or previously suffered bankruptcy, you can often still get approved at the dealership. This is because they can offer a range of loan options from multiple banks including both prime and subprime lenders. The majority of these lenders are not as concerned with your past credit history as they are with your ability to service the debt today and into the future.
A dealership is more likely to negotiate better terms with you because they are the ones selling you the vehicle and want to keep their customers happy. They also have incentive programs and financing specials that the banks won’t have access to, and they can process loans much faster than the banks can. Most banking institutions can take a few days to a few weeks to get all the paperwork in order, whereas a dealership can usually process the loan the same day or within 48 hours.
If you’re planning on financing your next auto purchase, visit us online at Barrhaven Honda and apply online using our fast credit application. Within 20 minutes you will be put in contact with one of our financing specialists who can help you get the process started.