Where to get your car loan: Bank or dealer?

November 23, 2019

If you’re searching for a new or used car, chances are good that you’re planning on financing. The right choice between the two depends upon few different factors, and neither option is inherently better than the other.

Depending on your situation, picking one over the other could save you both time and money. Read on to learn more about each option and how to pick the right one.


 Bank Finance includes:

  • Low rates

    Get a low rate when you purchase a new and used cars or refinance.

  • Easy online application

    Find out if you qualify in just a few clicks.

  • Quick decision

    With no-fee options, mobile-friendly application, you’ll quickly know your rate before you get to the dealer.

  • Interest rate discount

    Using banks clients may be eligible for a Preferred Rewards discount.

Dealers Finance includes:

  • Convenience

    Financing a car with the car dealer can make the financing experience more convenient. Instead of faxing or delivering important documents (such as a buyer’s order or bill of sale), and traveling to multiple locations to sign your paperwork, you can use dealer financing to save time.

  • Extended Terms

    Auto dealer financing may offer more liberal auto loan terms. Most banks and credit unions only offer extended-term financing    (e.g. 72 months) on new or demo vehicles, whereas some dealers can  arrange long-term financing on vehicles a few years old.

  • Higher Advance (Loan-to-Value Ratio)

    While many banks and credit unions are relatively strict regarding their advance, some auto dealers can arrange financing with aggressive loan-to-value ratios (Ex. 115% of value versus 90% of value).

Who offers a best deal?

In any situation, it’s best to choose the option that will save you the most money. Unfortunately, it’s not always easy to know what that option is upfront.

As a result, it may be worth trying to get preapproved by a bank or credit union before you head to the dealership, and then asking the dealer to get quotes as well. That way you can compare and determine which option is best.