General Question

pleiades's avatar

Which is best? Financing with the car store or financing with a bank/credit union?

Asked by pleiades (6607points) September 14th, 2013

Obviously cash money is the best!

But yes tight budget but I need a car to keep rolling! I’ve had the hardest time passing smog and I’ve put so much money into a 1995 Nissan 200sx-se 1.6 that I’m just over it. I can’t get her to pass smog.


I’m wanting to join the future finally and go for a 2010+ vehicle.

So what do you think? Finance with the auto store? Or with a bank?

How does it work to finance with a bank? Do they approve a loan and then only have a select few dealers? Or are they more wide range than that?

Thanks so much!

Share your experience with me please!

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11 Answers

keobooks's avatar

Bank. The auto store gets RIDICULOUS interest rates.

jerv's avatar

Credit union is best, then bank. Do not go through the dealer if possible unlike you want to be sodomized.

elbanditoroso's avatar

Depends on the details. It is more likely that on a used car, you will get a better rate from the bank. But not always. Every situation is different, and you need to get the details from both.

By the way, the car place doesn’t do the lending themselves – they sell the loan to another company that is actually doing the transaction.

Word of advice: Get approved for the loan BEFORE you buy the car.

Pachy's avatar

Personal experience speaking here… credit Union, no contest, especially if you already have one or more accounts with them. I recently refinanced my car recently with my CU because their interest rates were lower than anybody else’s and because, since I’ve done business with them for years, they were willing to approved me immediately. I’d stay away from banks and auto stores. No matter what they say, you’ll pay more than you would at a CU.

Neodarwinian's avatar

How good is your credit?

Good enough? Then go with the credit union.

Not good enough?

You may be forced into in house, so to speak, financing.

marinelife's avatar

Of the choices you mentioned, I think a credit union is best. They will give you the best interest rate.

DWW25921's avatar

Credit Union! :)

SadieMartinPaul's avatar

Pretend that you’re going to finance through the dealership. Car loans are so lucrative, you’ll be in a better position to negotiate and get a good deal. Then, after the sales papers have been finalized, but before you sign, say that you still want to buy the car but have secured a loan from your credit union.

This advice comes from Paul, who lost his job during the recession and sold cars, for about 8 months, to earn a living. He told me that no buyer should enter the dealership saying that he/she wants to pay cash or get financing elsewhere.

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keobooks's avatar

I’ll just pop in and say financing a car is a bad investment. Car value goes down as soon as you drive it off the lot. The best thing to do is pay cash. If you can’t afford to pay cash, you can’t afford a new car.

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