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Better to get dealership financing or bank financing?

Before you finance your car at the dealership, it might help to explore all your possible options.

The first thing to do is to check with your bank or credit union. Generally most credit unions will be able to offer your financing at very competitive rates. Besides some of the banks and credit unions will reduce the interest rates if you have a direct deposit or multiple loans with them.

It is wise to get a pre-approved letter from the bank or credit union but don't mention it yet to the dealer. While negotiating for the new car, tell them that you are open to the option of getting a dealer financing. Once you have negotiated the price of the car, ask him what kind of financing is available and compare it with what your bank has to offer.

There are several on-line banks that may be able to offer you a good financing deal as well. Research and go with well known banks.

If you bank has a better offer, which is the case with most car loans, decline the dealer financing.

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