Financing a vehicle may seem incredibly complicated, especially for those who aren’t familiar with the general terms and options available. Fortunately, there are two quick and easy loan options that will allow you to get behind the wheel of a new car in no time at all. Here’s a quick comparison of direct lending versus dealership lending from us at Don Wessel Honda.
Getting a loan directly from a financial institution, usually a bank or credit union, is called direct lending. In direct lending, the customers agree to repay the financed amount plus interest over a period of time.
Since direct lending is so straightforward, there are a few helpful advantages.
First, buyers will be able to shop around at various lenders and inquire about their credit terms and specials. Second, customers will know the terms of the loan in advance, allowing you to make a purchase with those terms in mind.
Dealership lending is almost identical to direct lending except for the fact that the dealership loans the money and collects payments. Alternatively, a dealership can sell the contract to another financial institution instead.
Financing through a dealership is generally more convenient and offers multiple financing options as a result of the dealership’s business relationship with financial institutions. Some manufacturers offer special discount and financing programs through dealerships as well.