Direct Loans vs Dealer Loans

Posted: Saturday, August 4th, 2018

You’ll find that your credit history is the main factor when considering whether to get direct financing or dealer financing, as it affects the terms and rates that you will be eligible for. That being said, there are some important differences between dealer and direct loans that you should be aware of.

Dealer Financing

With a dealer loan you secure financing through the dealer with one of the lenders in their network. Factors to consider when applying for a dealer loan include:

  • Dealers can offer manufacturer incentives that include lower financing rates, including 0% financing, but your eligibility will depend upon your credit history
  • Through their network of lenders dealers can offer a variety of financing options
  • Many buyers find it more convenient to secure financing at the dealership

Direct Financing

Choosing a direct loan means that you enter into an agreement directly with a lender such as a bank, credit union, or finance company. The benefits of direct financing include:

  • The ability to shop around for the best terms and rates
  • If your credit rating is good your bank or credit union can offer a loan that is very competitive
  • Some finance companies, such as Green Light Auto Credit, specialize in providing loans for those who have bad credit or no credit at all

Find out More About Direct Loans and Dealer Loans

When you are planning on buying a car it makes sense to search for the best possible terms and rates on a loan. Green Light Auto Credit is happy to help you decide which loan method is right for you. Call us at (800) 200-5551 with any questions or apply for financing online.