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Car Financing - Auto Financing - How It Really Works - Articles Surfing
One of the most misunderstood concepts about buying or leasing a new car is how car financing really works. Every new car buyer should be aware that cost if insurance can vary significantly. The key idea to understand is that car dealers do not finance car loans and leases. However, dealers can most definitely influence how you finance and what you pay for financing.
Dealers always sell for cash
Car dealers are business people who have a certified franchise with one or more car manufacturers. They do not work for the manufacturer; the manufacturer does not possess the dealership.
Dealers purchase cars from the manufacturer, usually with huge "floor-plan" loans from a bank or finance company. Interest is charged by the bank on these loans. Dealers have to sell the cars off to pay these loans with related interest, as well as cover other operating expense of organizing a business.
The dealers always receive cash, after he sells or lease a car, whether it's straight from the customer, or from a finance company or bank who has loaned a customer the money.
Dealers don't finance car loans and leases
Dealers pre-approve car financing
The deal is NOT done after your car finance contract is signed
What you sign and what it means
If your lease or loan is not approved
What choices do you have?
Copyright © 1995 - Photius Coutsoukis (All Rights Reserved).
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