Car Loan Information
There are many websites about car loans and car loan information – some offer direct bank
car loans while others offer car dealer financing. Many of these websites however, aren’t
clear as to who is actually providing the financing. And since a very small percentage of
car buyers have the ability or desire to pay cash for a car, it’s important to understand
your options – particularly if you’ve experienced some difficulties with your credit. If
you're like most people, you're going to need to find an auto loan in order to finalize
your car purchase. Car loan information such as your personal credit and employment history,
debt to income ratio and other factors may limit your financing options or affect the total
cost of your car purchase.
In today's financial markets, getting the right car loan can be difficult but there
are still options - even for those who may have less than perfect credit. Generally
speaking, there are two primary channels available to consumers to get an auto loan –
direct bank car loans and indirect car dealer financing.
Direct Bank Car Loans
Direct bank car loans are loans made between you and a financial institution - directly.
In this instance, you will apply, and hopefully be approved for, a car loan prior to
visiting a dealership. Direct bank car loans allow you to purchase a car like a cash
buyer and eliminate the hassle of getting an auto loan through a car dealer. You can
apply through your personal bank, credit union or get an on-line auto loan through some
of the larger national banks and car loan companies. Most direct bank car loans serve
the prime and near prime credit customer.
Generally speaking, if your credit score is below 625 or if other qualifying attributes
such as length of time on the bureau, high credit amount and other car loan information
fail to meet certain qualifying criteria, you may not qualify for direct bank car loans.
If you are unsure, click here to get your
credit score.
To see if you qualify for a car loan online through one of Car Loan IQ's direct lending
partners, visit our
Smart Car Loan Tool now.
Car Dealer Financing
With car dealer financing, the auto dealer arranges your car loan through a contractual
relationship they have with auto finance companies. In most instances, car dealers don’t
actually provide the car financing, but rather act as a “loan arranger”. The car dealer
collects all of your car loan information, forwards it to a lender for a loan approval
and then sells the loan to the lender. Some of the best car dealer financing is available
through a franchise / name brand auto dealership's captive auto finance company such as
Ford Motor Credit Corporation, General Motors Acceptance Corporation or Toyota Motor Credit
Corporation. These car dealer financing companies were established to support the sales
of the manufacturer's vehicles. Often times, captive auto finance companies provide
incentives for consumers to purchase vehicles from their dealerships by offering subsidized
pricing on interest rates like zero percent car dealer financing.
If you're considering buying a new car, make sure you research all the car loan
information regarding car dealer financing through the manufacturer’s captive auto
finance company before you visit a dealership. Sometimes the manufacturer will
also offer a cash rebate which can be chosen instead of the subsidized interest
rate. Use our
Car Loan Calculator
to help you choose between cash rebates and
car dealer financing specials. As with most direct bank car loans, you'll need to
have very good credit in order to qualify for an auto loan through this channel.
In addition to car dealer financing offered through the captive auto finance companies,
franchise auto dealers have access to hundreds of other car loan companies – many that
offer auto loans for any credit situation – including
Bad Credit Car Loans.
Although
all dealers have access to bad credit auto loans, many of them are not interested or
prepared to help people with bad credit get car loans. Car Loan IQ has a network of
car dealers that offer car dealer financing for bad credit.
Know your car loan information before applying for auto financing. Generally speaking,
if your credit score is above 625, direct bank car loans might be your best opportunity.
If your credit score is below 625, car dealer financing might be better.
If you are unsure, click here to get your
credit score.
To see if you qualify for a car loan online through one of Car Loan IQ's direct lending
partners, visit our
Smart Car Loan Tool now.
