It’s not always easy to get financing through a dealership. The process can be time-consuming and frustrating, and the rates might not be as competitive as you think they are. If you search for a way to finance your new car without all of these hassles, then look no further.
1) You can obtain financing with an interest rate that is better than what you would get through a dealership.
Dealerships often have strict guidelines and regulations regarding how much money they’re willing to lend out. This means that the rates for their customers are typically higher because there’s less risk involved on behalf of the lender. However, if you’re able to find your lender who doesn’t have these limitations or restrictions, you could end up having a lower interest rate simply because they don’t mind loaning the amount of money you need access to.
For example: let’s say that someone needs $30 000 to make their next car purchase happen within budget limits. They’ve taken every possible step towards obtaining this funding, but they simply can’t find a lender willing to work with them. The interest rate that the dealership would charge for this amount of money could be anywhere from 12-30% APR (depending on their guidelines).
2) You can get approved for funding even if you have bad credit.
During the last financial crisis, millions of Americans were in foreclosure or bankruptcy. While some people were able to recover from these unfortunate situations and restore their credit rating up towards the 700+ range, there are still many more who haven’t been as lucky. If your case falls into this category (e.g., you’ve had a lot of trouble with loan repayment within recent years), then you must take whatever steps necessary to improve your credit score before applying for dealer financing.
The reason why is because dealerships will typically only approve loans for customers whose scores fall between 720-850+, depending on what state they’re located in (and which bank they work with). If your credit score is something other than this, then you’ll likely end up wasting a lot of time and energy trying to get approved for dealer financing. And even if they were willing to work with you (which may or may not happen), the interest rates you’d be charged. It would be much higher due to the increased risk.
Luckily, many lenders can approve funding at much lower credit scores than what dealerships will typically accept (*with good down payment options). Once again: BFS Capital has been known as one such lender in recent years. You won’t find any shady business practices here – just straightforward lending terms that offer low-interest rates and monthly payments which won’t break the bank.
3) You can use dealer financing as a last resort.
If you ever find yourself in a position where you’ve already exhausted all of your available options, then it’s time to think about using dealer financing as a final solution. This means that you need to be prepared for what might happen if their terms and conditions don’t work out like they should (e.g., you aren’t approved for the amount of money you were looking to borrow). In such cases, however, this could end up being much easier than trying to secure another lender who is willing to take on the same risk without charging an exorbitant interest rate (*or requiring too many collateralized assets).
4) You can pay off your dealer financing quickly.
The longer you’re able to keep your loan, the more interest payments that you’ll end up paying overtime. For example: let’s say that somebody is scheduled to make $500 monthly contributions towards their car purchase, and they’ve agreed upon a 24% APR with the dealership. If we take this number and multiply it by 60 (which would be done to determine how much money was paid during one full year) – then we’d see an extra $11 400 added onto their final payment amount. This means that if someone were able *take out a personal loan from BFS Capital, they could potentially save themselves as much as $11 000+ just because of how long it takes for dealer financing to be paid off (in comparison to personal loans).
However, you must keep in mind that dealer financing only works if your car is still worth what you originally agreed upon. If not, they can sell it for whatever price they see fit and use it to pay back their loan.