Alternatives to Car Dealership Financing

There are traditional banks and lenders offering car loans and non traditional lenders too offering car loans for people with bad credit or financial difficulties. Thus anyone seeking finance to purchase a car can get approved with significantly lower costs than financing with a car dealership the purchase of the vehicle.

Car Dealership Financing's Drawbacks

Financing through a car dealership can be extremely expensive. The interest rate charge by dealerships is almost doubling the interest rate charged by traditional lenders. These high prices are due to the fact that when you resort to car dealerships for financing there is a third party that provides the funds. Thus you are paying for the services of two roles: The actual lender and the intermediary.

Besides, car dealerships only offer financing for the cars that they sell. Thus, your options as regards to brands and models are limited. And if you happen to find a private lender offering for sale the car of your dreams at a very advantageous price, you can never resort to a car dealership in order to get the funds for purchasing the car.

Traditional Lenders and Banks

Banks and traditional lenders offer finance for car purchases at very reasonable rates. Car loans are secured loans and thus carry low interest rates compared to personal loans that are unsecured. However, in order to get approved you need to show proof of a clean credit report and a steady income that will let you afford the monthly payments.

A car loan offered by a traditional lender will let you purchase any car you want and also if you visit car dealerships after getting approved for a car loan you can always bargain the price of the cars with the dealer and have more options as to the brand and model of the car that you'll purchase.

Non Traditional Lenders

Car loans offered by non traditional lenders provide financing for those with irregular credit and income situations. You need to always show proof of a suitable income, but you don't need to prove that you've been in the same job for many years or that your wage is deposited into your bank account.

Besides, the credit requirements are relaxed and anyone can get approved for a car loan as long as there are no mayor delinquencies in their recent credit history. Someone with bad credit, no credit at all or even a past bankruptcy on his credit report can obtain car loan financing through these non traditional lenders.

Where to Find Them?

The best way to obtain finance through a non traditional car loan lender is to seek lenders online. You can do a quick search for bad credit car loans online and you'll find many online lenders willing to offer you finance regardless of your credit. You may have to face slightly higher rates but the monthly payments are always affordable enough so any budgets with a regular income can meet them without sacrifices.


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Jessica Peterson writes about car financing among other subjects at her website Yourloanservices.com so if you have any doubt you can contact Jessica to get more financial information.

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