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Why You Should Always Finance Directly with a Bank

40% of consumers finance their vehicles through a bank, which are usually a great source for auto loans, but make sure you're dealing directly with the bank and not a middleman.

Most car dealers have relationships with banks, but you shouldn't let them arrange the financing unless you're willing to pay a fat commission.

This commission is called "finance reserve" and it could end up costing you over $2,500 on a 60-month loan.

If you're going to finance through a bank, make sure you do your paperwork at the bank, not at a dealership. Many people don't know this, but you can negotiate the rates directly with a bank.

First, you should comparison shop online for the best finance rates, then use those rates as a bargaining chip with the bank. See if they can beat your best rates.

You should also shop your rates to credit unions.

Some banks will give special loan rates if you have a long history with them, or if you already have a checking or savings account. You should contact all banks where you already have a relationship in place.

After you comparison shop your auto loan, your final step is to have the dealer try to beat your best rate.

There are cases where a dealer will beat your lowest rate (even if they arrange it through a bank), so you can rest assured you're getting the best auto loan possible - but only if you already took the time to shop around directly with the other finance sources.






3 Steps Every Car Buyer Needs to Take to Save Maximum Money

The key to getting the best deal is to gather price or lease bids from as many local dealers as possible. Then shop that best price around until no one can beat it. Here are the steps:

Step 1 Get Prices From My Trusted Network

Select the vehicle you're interested in to see if there are local dealers in my network who will provide you with their best upfront price. You will get direct access to an internet sales manager who you can further negotiate with online (no need to visit dealership).
Select Vehicle to Get Local Pricing

Step 2 Get Prices From TrueCar / CarsDirect

TrueCar, and CarsDirect are my top 2 online price quote recommendations. These services show you pre-negotiated prices from dealers closest to you - and the deals are usually pretty decent. But remember, you can still negotiate further.

Step 3 Complete my Checklist

Follow this up with my checklist to make sure you squeeze out every last bit of savings.
- Gregg Fidan

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About The Author

Gregg Fidan Gregg Fidan is the founder of RealCarTips. After being ripped off on his first car purchase, he devoted several years to figuring out the best ways to avoid scams and negotiate the best car deals. He has written hundreds of articles on the subject of car buying and taught thousands of car shoppers how to get the best deals.
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