Why Car Dealership Finance Isn’t Always the Cheapest Option

Dealership finance is convenient, which is why most people take it. You choose a car, sit down at a desk and the numbers are put in front of you. It feels simple, but simple does not always mean best value.

Dealership finance is convenient, which is why most people take it. You choose a car, sit down at a desk and the numbers are put in front of you. It feels simple, but simple does not always mean best value.

Most dealerships work with one lender. That means the finance you are offered is based on a single set of products and a single pricing structure. If that lender’s rate happens to be higher for your profile, you may never know because you are not shown anything else.

Dealership finance also forms part of the sales process. The aim is to make everything easy so you feel comfortable completing the purchase in one visit. There is nothing wrong with that approach, but it often means you don’t get to compare.

Another thing many people overlook is commission. Dealerships often receive commission for arranging finance. In many cases this doesn’t change the rate, but it is still worth knowing that different lenders can offer different commission structures. This can affect what is put in front of you.

Taking a step back and comparing finance separately to the car can give you a much clearer view of what is fair. When you see a few options from different lenders, you can sense immediately whether the dealership offer is strong or not.

If you want a more rounded view of what finance rates look like across a wider panel of lenders, we can show you multiple options and help you understand the differences.

Contact us if you’d like help with your next car.