Let’s face it—not everyone can pay cash upfront for a vehicle, especially a brand new one. Fortunately, car dealerships and banks offer financing solutions to make it easier and faster for customers to own the transport they need. However, each car loan comes with a unique set of pros and cons depending on where you’re getting the loan. Before applying for a car loan, it’s best to know whether a bank or a Ford dealer near Louisville, KY has a better offer.
Choice of Financing Program
If you apply for a car loan through a dealership, chances are you have very limited options because most dealerships only partner with a handful of lenders. A bank might be able to provide you with more flexibility as they have a much larger network of financers. However, the choices a Ford dealer near Louisville, KY offers may suit your needs better since dealerships design their programs to be attractive for buyers from all sectors.
What If You Have Less-Than-Perfect Credit?
Car loan applications usually entail a thorough credit check. Banks have stricter requirements when it comes to credit rating because they get less value from the loan than dealerships do. So, if you have less-than-perfect credit, you have a pretty slim chance at a good deal from a bank. Dealerships are more lenient when checking their customers’ credit rating, and their lenders don’t mind even if your credit score is below 750 because the accountability lies on the dealerships.
Interest Rates
Banks have a reputation for requiring high interest rates on their loans. Whether you are applying for a home, commercial, or auto loan, get ready to crunch some really big numbers. The same can be said for dealerships since they mark up their interest rates to cover commission and service costs. It would be best to compare their interest rates and choose the one that better suits your budget. In most cases, interest rates at car dealerships are still much lower even for customers with bad credit to keep their loans and products appealing to buyers.
Who Does the Legwork?
If you choose to take out a bank loan, you’ll have to do all the paperwork. You might also have some trouble getting a low-interest loan if your credit score is not high enough. With a dealership, however, the process is smoother and faster because they do the legwork. They even assign a consultant to discuss your options, allowing you to get a more personalized service. You can buy a car and get approval for a low-interest loan all at the same time. All you have to do is sign the contract and you can drive your vehicle home ASAP.
It pays to know a thing or two about car loans before heading to a car dealership to purchase a car. Make sure to do your homework and explore the options your chosen dealership offers. Don’t sign any documents unless you are absolutely sure you can afford to pay the car loan. Compare all loan programs available and think long-term. Check out Jim O’neal Ford for more helpful tips.
