The Ins & Outs of Vehicle Financing
Take the Guesswork Out of Vehicle Financing With In-House Car Loans from Auto Bank KC
Negotiating the price of a vehicle is only a part of the process of purchasing a vehicle. Vehicle purchasers sometimes overlook or simply do not understand the importance of vehicle financing as part of the total cost involved in purchasing a vehicle.
Traditional dealerships make a large amount of their profits from their finance department. Those dealerships do not want customers to know that when you have them arrange financing for you they go to their various lending sources and get the lowest available rate based on your financing application but then increase that interest rate as they are paid a commission based on this interest rate. This often results in the dealership making more money on the financing than they do on the actual vehicle sale. Knowing the truth about this can save you a considerable amount of money on a vehicle loan.
Sources for vehicle financing
When it comes to financing a vehicle, there are several different avenues that you can explore, each with its own benefits and drawbacks.
Financing with the dealership arranging the financing for you is one of the easiest ways to complete your vehicle purchase. It is convenient and a simple process if you have good credit. However, because of the dealership’s profit incentives in arranging the financing of your vehicle as outlined above this is not necessarily the most economical way for a purchaser to finance their vehicle.
Financing with a bank or credit union is another way to complete your vehicle purchase. The bank or credit union has no vested interest in making additional profits on your vehicle loan. The bank or credit union probably has an existing relationship with you and will more often than not offer you the best interest rate based on your credit.
One of the drawbacks to financing with a bank or credit union is that they may not be open when you are visiting the dealership so that you have to make a trip to the bank or credit union the next day to arrange for the financing after you have made the deal with the dealership to purchase your vehicle.
Financing with an online source has in recent times become another popular method of vehicle financing. Some online sources may even approve you in advance for a maximum amount that they will lend on a vehicle so that you know your limits and payments before even actually purchasing the vehicle. An obvious drawback to online financing is the lack of personal customer service for the customer.
Bad credit or no credit financing
If you have a poor credit score, which can happen due to many reasons, or if you have no credit history, bank loans and online lenders aren’t options.
An alternative method for vehicle purchasers to buy a vehicle are buy here pay here dealerships. A buy here pay here car dealership is different from traditional choices in that it specializes in low credit auto loans. The buy here pay here dealership controls the vehicle financing process as they are actually making in-house car loans to their customers.
These specialized used car dealerships have made the process of purchasing a vehicle painless and a transaction that is not demeaning to the purchaser. The purchaser at these dealerships is not treated as a less worthy customer; they are the target customer for the buy here pay here car dealership.
Buy Here Pay Here in Kansas City
Auto Bank KC is a premier example of buy here pay here dealerships. We have established ourselves as the premier buy here pay here car dealership in Kansas City. Our team of lending experts makes the vehicle purchase process simple with an online pre-approval application. The customer simply completes a short application form with basic information and Auto Bank KC will quickly pre-approve a specific maximum loan amount based on your income and calculated ability to repay the loan. We do not care about your credit score. We will make the loan on your ability to repay the loan based on your income.
After being pre-approved, all you have to do is come to the dealership with proof of income, and identification to shop for your vehicle. The professional staff at Auto Bank KC will then assist you in choosing a vehicle and completing the process.
Auto Bank has become the leader in the Kansas City area by providing customers with the highest standards of customer service. Auto Bank KC has two convenient locations in Kansas City, MO to serve you. Shop our inventory online or stop by and see us in person.