In-House Financing

4 Benefits Of In-House Financing For Cars

In-house financing for cars is an option that some buy here pay here car dealers offer for consumers. Meanwhile, most consumers get loans directly from the car manufacturers, banks or credit unions. In-house financing allows those with poor credit or no credit history to get a chance at owning a vehicle. The downside to this type of financing is that the interest rates are significantly higher than that of a traditional loan.

Though some people may argue that in-house financing has its downsides, there are numerous benefits as well. As long as you know what you’re signing and you trust the dealer, you can be off the car lot with a vehicle. Without further ado, below are the four benefits of choosing this financing option.

1. Easier Process Of Purchasing

The process of purchasing a car straight from the dealer can be slightly more satisfying, especially since they offer in-house financing. You can take a car home the same day, since all of the paperwork is done on the spot. The car dealership also goes out of their way to offer extra perks for purchasing from them such as an extended warranty, increased services and flexible interest rates.

2. Helps Those With Poor Credit

If you have poor credit or no credit history, you know how emotionally taxing it can be to get turned away from a car dealership for the umpteenth time. Dealerships that offer in-house financing are able to accommodate those customers that have poor credit scores and allow them the opportunity to re-finance later on.

When you first finance through the dealer, you will get a higher interest rate or a higher monthly payment, but in as little as six months, you can re-finance. Keep in mind, for people with bad credit, used car dealerships tend to be more flexible.

3. More Perks

Since the economy is much poorer than it used to be, car dealerships want to attract the attention of consumers. Most new dealerships try to provide incentives that reward their customers in the form of credits or rebates that are only available through the dealership. Oftentimes, extended financing and low credit rates are used to weed out the competition. It is not unheard of for car dealers to offer anywhere from zero to two percent financing.

Why are these car dealers able to do that? They actually own the cars they are selling, and don’t have to borrow for loans. This enables them to offer lower interest rates and better perks when consumers decide to make a purchase.

4. Large Volume Loans Equal Better Interest Rates

Though in some instances (like bad credit) financing in-house causes interest rates to increase, for the most part, you can expect to pay less when dealing directly with the dealership. This is largely due to the fact that dealerships have their own loan departments since they get a large number of loan applications. In turn, you can expect lower interest rates than that of banks and credit unions.

Keep in mind that financing in-house may not always be the best option for everyone. Ultimately, if you have good credit, you can afford to shop around and consider if there are perhaps better loan institutions catering to your needs. For the most part however, in-house financing offers everyone an equal opportunity to own a car- may it be used or new. Low interest rates in this type of financing are only available to those with the best credit scores, as dealerships make a good chunk of money off of higher interest rates for high risk consumers. Apply now and drive your new car home today!

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