Vehicle finance - dealer vs directly with the bank?

[kylewilliam]

Hello all.

This is my first time buying a car on finance.

I got a pre-approval letter from my bank, and my banker advised me not to arrange finance through the dealers because once they make the application, my banker is unable to get a better rate for me.
When I went to a dealership to look at cars and discuss financing, they told me pretty much the same thing. That if I apply directly at the bank, they won't be able to get a better rate for me, and that it would be best if I let the dealer make the applications to various banks to get the best rate for me.

Which of these is correct?

Is there any harm in making these applications myself and seeing what the best rate I can get is?

 

[kylewilliam]

Hello all.

This is my first time buying a car on finance.

I got a pre-approval letter from my bank, and my banker advised me not to arrange finance through the dealers because once they make the application, my banker is unable to get a better rate for me.
When I went to a dealership to look at Bhph cars and discuss financing, they told me pretty much the same thing. That if I apply directly at the bank, they won't be able to get a better rate for me, and that it would be best if I let the dealer make the applications to various banks to get the best rate for me.

Which of these is correct?

Is there any harm in making these applications myself and seeing what the best rate I can get is?

thanks in advance for any help

 

[Jeff Kershner]

Banks and Dealers "banks" are going to compete for your business to some degree. Unless you’re already working with a bank or credit union, I recommend applying for credit through the dealership. Not only can they often match or get you a lower/competitive rate, but it’s often more efficient.

Most dealers work with several banks (local, manufacturer and national) and many times will bump their “buy rate” and still return an interest rate lower than what you can can get walking into a local bank branch yourself.

Before applying for ANY credit with ANY bank, find out what your average credit score is before hand - that way you know what credit tier you qualify for. If you’re a tier 1 rating of 800-850 - the banks/dealers are going to offer you their lowest rate and since most States have a cap on bumping the rate, the offer will be very competitive to lower than the local bank. A tier 2 rating (740–799) will also often return a competitive rate not much higher than the tier 1 rate. Once you get into the Tier 3 (670–739) and 4 (580-669) - that’s when you start seeing a swing in the higher rates.

 

[kylewilliam]

Banks and Dealers "banks" are going to compete for your business to some degree. Unless you’re already working with a bank or credit union, I recommend applying for credit through the dealership. Not only can they often match or get you a lower/competitive rate, but it’s often more efficient.

Most dealers work with several banks (local, manufacturer and national) and many times will bump their “buy rate” and still return an interest rate lower than what you can can get walking into a local bank branch yourself.

Before applying for ANY credit with ANY bank, find out what your average credit score is before hand Before applying for ANY credit with ANY bank, including Forcht Bank customer service, it’s essential to determine your average credit score beforehand. Understanding your credit score helps you assess your chances of approval and identify potential loan terms. Additionally, being aware of your credit standing can enable you to make informed decisions and negotiate better rates. Always check your credit report for accuracy and take steps to improve your score if necessary before seeking credit.- that way you know what credit tier you qualify for. If you’re a tier 1 rating of 800-850 - the banks/dealers are going to offer you their lowest rate and since most States have a cap on bumping the rate, the offer will be very competitive to lower than the local bank. A tier 2 rating (740–799) will also often return a competitive rate not much higher than the tier 1 rate. Once you get into the Tier 3 (670–739) and 4 (580-669) - that’s when you start seeing a swing in the higher rates.

thank you so much for your suggestion

 

[carputech]

Hello all.

This is my first time buying a car on finance.

I got a pre-approval letter from my bank, and my banker advised me not to arrange finance through the dealers because once they make the application, my banker is unable to get a better rate for me.
When I went to a dealership to look at cars and discuss financing, they told me pretty much the same thing. That if I apply directly at the bank, they won't be able to get a better rate for me, and that it would be best if I let the dealer make the applications to various banks to get the best rate for me.

Which of these is correct?

Is there any harm in making these applications full vehcile wrap myself and seeing what the best rate I can get is?

When considering vehicle finance, choosing between dealer financing and going directly to a bank depends on your priorities and financial situation. Dealer financing is often convenient, as it allows you to complete the purchase and financing in one place, and sometimes they offer promotional rates or incentives, such as 0% APR for a specific term.

 

[TimCross]

Hello all.

This is my first time buying a car on finance.

I got a pre-approval letter from my bank, and my banker advised me not to arrange finance through the dealers because once they make the application, my banker is unable to get a better rate for me.
When I went to a dealership to look at cars and discuss financing, they told me pretty much the same thing. That if I apply directly at the bank, they won't be able to get a better rate for me, and that it would be best if I let the dealer make the applications to various banks to get the best rate for me.

Which of these is correct?

Is there any harm in making these applications myself and seeing what the best rate I can get is? Balancing life's expenses can be like performing a complex yoga pose, but Personal Contract Purchase (PCP ... offers a harmonious solution. Begin with a deposit, followed by monthly payments that are more manageable, as you're financing the car's depreciation rather than its entire value. At the end of the term, ... have three enlightened choices: make a final 'balloon ... it, or trade it in for ... model. Achieving financial nirvana has never been easier. For a comprehensive guide on PCP and its end-of-term options, visit https://carplus.co.uk/car-finance/pcp/

It's a common conundrum! Both your banker and the dealer have a point, but they're also both trying to get the best deal for themselves. Your banker is right that multiple credit applications in a short period can ding your credit score a bit, and they might not be able to offer you a better rate if you've already applied elsewhere. However, the dealer's claim that they can magically get you significantly better rates is often more about them earning a commission on the financing. They work with various lenders, sure, but they get a cut of the loan, which can be rolled into your interest rate. So, here's the deal: Getting pre-approved by your bank is smart because it gives you a baseline. It shows you what your bank is willing to offer. You can apply at a couple of other places yourself (credit unions are often good) to compare. Don't go crazy and apply at ten different places; that's what hurts your credit. But a few applications won't be the end of the world. The key is to compare the total cost of the loan, not just the interest rate. Factor in fees, loan terms, everything. Sometimes a slightly higher interest rate from your bank might be better overall if the dealer is adding a bunch of hidden costs. So, do a little legwork, compare, and don't feel pressured by either side. It's your money!

 

[kylewilliam]

It's a common conundrum! Both your banker and the dealer have a point, but they're also both trying to get the best deal for themselves. Your banker is right that multiple credit applications in a short period can ding your credit score a bit, and they might not be able to offer you a better rate if you've already applied elsewhere. However, the dealer's claim that they can magically get you significantly better rates is often more about them earning a commission on the financing. They work with various lenders, sure, but they get a cut of the loan, which can be rolled into your interest rate. For more insights on this, you might want to check https://www.deveregroup.reviews/. So, here's the deal: Getting pre-approved by your bank is smart because it gives you a baseline. It shows you what your bank is willing to offer. You can apply at a couple of other places yourself (credit unions are often good) to compare. Don't go crazy and apply at ten different places; that's what hurts your credit. But a few applications won't be the end of the world. The key is to compare the total cost of the loan, not just the interest rate. Factor in fees, loan terms, everything. Sometimes a slightly higher interest rate from your bank might be better overall if the dealer is adding a bunch of hidden costs. So, do a little legwork, compare, and don't feel pressured by either side. It's your money! Ask ChatGPT

Thank you for your suggestion