Financing through a dealer?

Question

I am planning to get a used car within this year. I tried getting a line of credit through my bank but got denied. What are the pros and cons of getting financed through a dealer?

Answer 1

If you were denied at the bank, ask them why.  If you got a rejection letter that showed they relied on information given by a credit reporting agency, that gives you the right to look at your credit file at no charge.  See what the problem is with your credit, and take steps to correct it.

Dealer credit is generally at a higher interest rate.

Answer 2

If you got denied through your bank then you will either 1. come up with bigger down payment, 2. make at least 1500.00 a month, be on same job for 1 year and one year at same residence and have 8-10 referals besides utility bills, paychecks, and other mail proving your address. This is because dealers use same banks you go to that denied you.  You most likely will have to go secondarey bank which you will pay high interest, at least 1/3 down payment and the vehicle has to be priced within NADA guidelines in other words the bank will tell you how much you can borrow and on which car.  Their are no cons since dealers get a better rate the you can due to using bank with a lot of business.  they get a rate up to 2 poits below what the public can get.  A dealer cannot charge more then 2 points above their rate.  They also do all paperwork and title work so it is easier then shopping rates which at this point is not wise as yu might have to get something less then you want and prove your credit reliability.  If it is real bad the you will need cash or do not meet above requirements wil need cash and pay ALL bills on time.

Answer 3

Why not just get a secured loan ( a normal used-car loan ) at your bank instead of a line of credit?