Which Car Loan is Best – Dealership or Bank?

Auto Loan 


If you are in the market for a new or used car in the Arlington area, it is likely that you will finance your next vehicle purchase.To ensure that you get the best deal possible, it is important to do your research before signing on the dotted line. Determine whether financing through the dealership or through a bank or credit union is the right option for you, then rely on the Hiley Mazda finance department to guide you through the auto financing process!

How to Find the Lowest Rate

There’s no surefire way to tell whether your dealer will offer a lower interest rate than your bank; in many cases, dealer financing is actually the same as bank financing. The dealer simply goes to the bank and does the legwork for you. However, it can be beneficial to go to your bank before choosing your vehicle so you can find out their rate first. Then, you can compare that to your dealer’s and see if your dealer can match the rate if the bank’s is lower.

Dealer Financing

  • Pros: Automakers will occasionally have promotions where they offer very low interest rates on new cars, which a typical bank wouldn’t do. Dealers will also “shop around” so to speak, and will find the best bank rate in the area.
  • Cons: Dealer financing is a common option because it offers the simplest route to buyers – they can choose and finance without leaving the dealership. However, it’s important to ensure that your dealership isn’t marking up the bank’s rates in order to make money.

Bank Financing

  • Pros: The main advantage of car financing through a bank is that they won’t mark up interest rates as some dealers might. Because of this there’s no middleman, so rates could potentially be better.
  • Cons: You can negotiate interest rates with your dealer, but banks will typically offer just one rate. They also won’t shop your credit around to lenders like dealers do.

Rely on Hiley Mazda for All Things Finance

No matter which option you ultimately decide on, you can count on our friendly and knowledgeable finance experts to help you every step of the way. For more information, contact us today, or begin the financing approval process online from the comfort of your home.

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