Car purchase financing: dealership or finance?

Except for the possibility of having a bit of capital aside, it is unlikely that those who buy a vehicle do so with their own means, often and (often) willingly to use a loan from the same dealer or at their bank. / financial trust .

But which is the most convenient choice ? Better to buy a car by financing it at the dealership from the dealer? Or is it better to be financed by the bank and, with the proceeds of the loan, buy the car without borrowing from the dealer?

Dealership loan

Dealership loan

Let’s start by reminding that we are talking about two obviously different technical forms, considering and considering that the loan is a personal loan , and the loan from the dealership is a loan .

This loan is generally characterized by a fixed rate, an amortization schedule with a constant rate of no more than 5 years, and is provided in a “virtual” manner: you will certainly not see the cash passing in your hands, or the credits on your bank account, considering that the amount of the disbursement will end up directly in the coffers of the dealer who will give you the car.

Also take into account that generally the financing is not carried out by the concessionaire, as much as by a bank or a financial company with which the concessionaire has stipulated agreements or, in other cases, especially linked to particularly important concessionaires linked to parent companies, by the division of the same.

So, you sign the forms at the dealer, you get the car and you start to repay the principal by paying installments on your current account or with bulletins. But is it the most convenient formula?

Personal loan in financial

Personal loan in financial


Taking up the ideas with which we have concluded the previous paragraph, we stress how often the conditions of the loan finalized in the concessionaire are “armored”, or non-negotiable, and frequently are not the lowest on the market, often being commercially balanced by the greater ease of obtaining with respect to non-consumer credit.

Therefore, except for the case that the concessionaire is not making particularly attractive promotional sales through its line of credit, our advice is to try to understand the conditions of indebtedness on the market.

By choosing a personal loan compared to the finalized loan , in fact, the buyer of the vehicle retains the right to personally choose the financial person from whom to obtain the loan. This is certainly not a guarantee of greater convenience than the loan finalized in the dealership, but it is certainly an opportunity not to be underestimated, as it exposes the customer to be able to select the best conditions from time to time found by comparing different offers.

Technically, as above we have already anticipated, the disbursement of the loan will not be carried out directly in the hands of the retailer, but in the current account of the client of the financial institution. He will then have the task of paying, with this proceeds, the car to be purchased.