The Auto Financing Game: How to Outsmart the Dealer and Win
Definition of Auto Financing and Types of Loans
Auto financing refers to the process of borrowing money to purchase a vehicle. There are two main types of auto loans: direct and indirect.
Direct Auto Loans
Direct auto loans are obtained directly from a bank, credit union, or online lender. With a direct loan, the lender provides the funds to purchase the vehicle, and you make monthly payments directly to them. This type of loan allows you to secure financing before visiting a dealership, giving you more negotiating power.
Indirect Auto Loans
Indirect auto loans are facilitated through a third party, typically a car dealership. The dealership acts as a middleman, working with various lenders to arrange financing for the customer. While convenient, indirect loans may come with higher interest rates and less favorable terms compared to direct loans.(read more)