Dealership vs Bank Auto Loan Rates: Where's the Best Deal?

For those looking to get a loan for their car purchase, choosing between various lenders based on dealership vs. bank auto loan rates can seem like a hassle. The convenience of a dealership is important to some buyers, but if you are looking for the best deal, then researching bank auto loan rates is a must.

Bank Auto Loan Rates.

In general, banks offer the best overall deals to consumers as they typically offer lower interest rates, are more upfront about additional charges and fees and do not have control over the purchase price of the vehicle. Additionally, bank personnel are trained in the financial field and can offer options that are more personalized to your needs. Dealerships, on the other hand, are staffed by people who know how to sell cars and whose primary objectives are to make you desire the car, while keeping their eye on the bottom line. Banks, too, are profitable, but do not engage in sales tactics that seem to characterize car dealerships. As lenders, they are also more likely to take the time to help you understand your loan.

Dealership Loan Rates.

It is possible to get a good deal with a car dealership because of additional options.  Dealerships can offer benefits, such as cash back, rebate offers and negotiable terms. Be sure you settle your vehicle purchase price before starting any discussion about your auto loan. Also, make sure that all terms of the auto loan are completely finalized before walking out of the dealership because you may find yourself receiving a call from the car dealership telling you there was a problem with the loan offer.  They may refer you to an affiliated lender and say they can offer you a loan at a slightly higher rate. Knowledge is your best defense against any tricky tactics a dealership may try to use. Do not accept anything you do not understand and review all fees and costs associated with loan terms. Remember that you do not need to make the decision in one sitting, take some time to research and find the best loan terms available to you.

Which Is Better?

Your personal financing preferences will decide which financing type works best for you. Dealership loans usually come with quick decision windows, but, more negotiable terms that might better fit your financial situation.  However, banks, offer stability and a larger variety of loan possibilities.  The best deals found in banks are usually contingent upon a good credit history and a good loan officer.  You loan officer should be willing to take the time to explain all your options.

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