Dealership vs Bank – Car Financing

When it comes to financing a car, buyers find it quite challenging, as they have the freedom of approaching a bank or dealership. If you want to make the right decision, you need to know the difference between both these types of financing.

Keep in mind that it isn’t always true that the banks will offer better rates than the dealerships or vice versa. Instead, you should make a list of banks and dealerships and compare them to see which one suits your requirements. Here are the differences between bank and dealership financing.


If you are approaching a bank with whom you hold an account, you already have a relationship. As a result of this, it becomes easier to get an auto loan from them. Also, if you make late payments, you can work with your bank and come up with an agreement, which works well for both parties. Another advantage of banks is that they never practice marking up the rate of interest, as there is no involvement of middlemen.

However, there are several downsides to bank financing. For instance, every bank will go through your credit score, before determining whether you are worth the risk. If you have bad or no credit, getting a loan becomes almost impossible. At the same time, you can’t negotiate with the bank to lower the interest rate for the auto loan.


As dealerships tend to work with third-party lenders, they offer different types of financing options, which you can never get from banks. Dealerships don’t use your credit score to determine whether you have the ability to repay the loan. Instead, they look for other factors such as employment, which is a better indicator of whether you can afford to make the monthly payments. They also handle all the paperwork, making it easy to take a car loan. On top of that, there is a very good chance of getting approved on the same day you approach them, allowing you to drive home with your favorite car.

However, the downside is that some of them have high rates of interest. Also, if you make a late payment, you might have to pay larger amounts as a penalty.

These are the differences between bank and dealership financing. If you want to get the best car loan deal in the industry, contact TakeTheDrive. Thanks to their partnerships with a myriad of dealerships, you get access to a wide range of cars at unbelievable rates of interest!

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