In-house financing can help you get approved for a car loan easily. Here’s everything you need to know about in-house financing dealerships. Almost 78 million cars were sold globally in 2018. Many of those will be bought using a car loan approved from a bank but for many people that isn’t an option. If you can’t get a loan due to a poor credit rating then in house financing dealerships could be the answer.
If you have been thinking about your loan options you might be wondering about in house options. Let’s take a look at the pros and cons of using in house financing dealerships.
Advantages of In House Financing Dealerships
If you have a poor credit history (you can check using Credit Karma) then you might not get a loan approved by your bank. An in house financing dealership will allow you to borrow without the traditional roadblocks of bank regulations.
Why should you opt for an in house financing dealership?
Your chances of approval are much higher as in-house financing provides more flexibility for loans.
Say goodbye to the back and forth of pre-approvals. You’re dealing with the dealership directly so it’s much smoother and all dealt with in-house.
Improves Your Credit Rating
If you are approved for an in-house loan and you meet your monthly payments you can start to increase your credit rating. This means that the next time you want to buy a car you might be in a better position for a bank loan.
Disadvantages of In House Financing Dealerships
So far in house financing dealerships are sounding pretty great. However, it’s crucial to know what you’re getting yourself into. There are two main disadvantages to this method of financing:
Higher Interest Rates
Traditionally when you borrow from a dealership then you are going to be facing higher interest rates. The loan might even be a precomputed interest loan which is dangerous financially. Make sure you take a good look at the numbers.
Higher Vehicle Prices
Since you can’t shop around and have to buy from the dealership then you won’t get the best deal. They are in a position to price as they please which means you have to meet that price.
They can also lend as much as they want and whatever prices they choose. Just make sure you aren’t borrowing more than the car is worth and getting yourself into debt.
If you want some extra cash to buy your car have you considered selling your current car? Even if it’s not roadworthy. Find out who buys cars that don’t run.
One For The Road
In house financing dealerships are an option for the many people struggling to secure traditional financing. Just make sure you know what you’re getting yourself into to play it safe.
The last thing you want is to end up owing more than the value of the car. Be cautious but this could be the road to improving your credit rating and having the car you need.
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