3 Reasons Why Banks Are a Great Option for Car Loans

When you’re looking for a loan to buy a car, you usually have two options: a dealership’s financed loan or a financial institution’s loan. While shopping for a vehicle and secure financing all in one place can seem more convenient, it might not be the best choice. Getting a car loan from a bank may actually be a better choice. Here’s why.

Your Car Loan Can Be Pre-Approved by A Bank

Some banks give you the option to get pre-approved. Here, the bank will let you know the loan amount, rate, and terms that are conditionally approved for you. This doesn’t mean you will get the loan or get the same rate and terms; it’s more like a reliable estimation. This will help you shop around and get the best deal. Some automakers’ finance companies also offer the option to get pre-approved for a loan. However, you can only use such a loan to buy a vehicle from a participating dealership.

Avoid Marked-Up Interest Rates

When it comes to dealer-arranged financing, the dealer essentially gives you loan options from various financial institutions such as banks, credit unions, or the automaker’s finance company – while this makes comparisons easy, the dealership may also mark up the cost of the loan. Of course, if you’ve done your homework and know the going rates, you can negotiate with the dealer.

A Bank Won’t Pressure You to Buy a Car

A dealership is the worst place to get a loan if you want to avoid making an impulse purchase. Look around, and then learn to walk away. Take your time to compare your financing options far away from the added pressure and stress of a dealer trying to close a sale.

Finally, with banks, credit unions, online lenders, and dealerships all offering loans, you could have many auto financing options. So take your time to understand the fine print and what the best deal may be. Once you have found your car, you can always offer the dealer the chance to beat your best loan offer – it’s a win-win!