Auto Store

Spectacular Automotive

5 Essential Tips For Financing Your New Vehicle at an Auto Dealership

5 Essential Tips For Financing Your New Vehicle at an Auto Dealership

Dealerships often offer carmakers special financing, saving you time and hassle. But it’s worth considering other lenders, too.

5 Essential Tips For Financing Your New Vehicle at an Auto Dealership


Auto loans significantly impact how much you pay for a new vehicle. How can you make sure your loan fits within your budget? Follow these tips:

Get Pre-approved

Getting pre-approved for financing before you ever step foot on the dealer’s lot can save you time and money. It will help you keep your credit score in good standing and give you an idea of your budget to avoid getting carried away with expensive add-ons.

In addition to knowing your maximum price, pre-approval can give you a better sense of credit terms such as annual percentage rate (APR) and loan term. This can help you compare dealerships’ offers and potentiator interest rates, saving you money in the long run.

Be Flexible

Dealership financing can be convenient, but experts recommend getting outside financing first.

Dealers may also offer manufacturer-sponsored low-rate or incentive programs, which can be a good option for some buyers.

Make sure to factor the cost of car insurance into your budget before buying a new Chevy. Also, beware of dealers trying to tack on extras or change loan terms without your consent.

Shop Around

Dealership financing can be convenient if you don’t have more shop around on your own, and they may have relationships with multiple lenders that allow them to offer a range of credit options (including as low as 0%). However, you’re not guaranteed a lower interest rate.

It’s also common for dealerships to tuck extras into their financing offers. These add-ons can include everything from fabric protector to rustproofing, and they’re often marked up significantly. It’s best to avoid them altogether if you can. Instead, it would be best if you asked to see a car’s “out-the-door” price before financing and negotiate on that basis—it’ll be easier to spot hidden fees. You can also use this information to compare offers from other dealers on an apples-to-apples basis.

Know Your Limits

Unless you walk into your local bank, getting an auto loan is more accessible. However, car dealerships offer dealer-arranged financing through their finance departments. Some are independent, and some are franchise dealerships that work directly with a vehicle manufacturer. They may also operate “buy here, pay here” (BHPH) dealerships that work with customers with bad credit.

Knowing your limits is the best way to avoid letting dealers manipulate you. Know your credit score and the maximum amount you can comfortably afford to borrow. Be sure to factor in ownership costs such as insurance, taxes, fees, and warranties. Also, don’t negotiate based on your monthly payment; you’ll pay more in the long run. Instead, prioritize your debt payments and work towards whittling down your credit balances to improve your DTI.

Don’t Be Afraid to Ask Questions

While some dealerships may offer in-house financing, it’s important always to ask what rates you can get before agreeing.

Be firm when negotiating, but remain calm. Salespeople can tell if you’re nervous, so be confident and know what you want to pay. The best way to avoid these tactics is to do your homework in advance, including getting pre-approved for a loan. This will give you more negotiating power at the dealership.