Difference between direct lending and dealership financing

Difference between direct lending and dealership financing

Written By Fred Patrick

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There are a number ways to buy a car through financing. Vehicle financing is very popular across the world and is getting more popularity with each passing day. The two most common ways to finance a vehicle is dealership financing and direct lending. In this article, we will discuss both of these lending methods in detail. Here you go:

-          Dealership financing
Dealership financing has been famous for its ease and convenience. Car owners who have purchased cars through this process have reported that this is one of the easiest methods of financing they have ever experienced. Dealers provide complete guidance and the time to return the borrowed amount is larger. If you buy a car through this way, you will have to pay the actual amount plus the interest amount. However, the rate of interest applied by the dealers is usually low. Dealers have the right to retain the contract and they can give the charge to any financial institution.

-          Direct lending
Another way to buy a car on credit is direct lending. Direct lending refers to buying a car directly through a bank. Some people have reported that this procedure is difficult in comparison to the former one. However, you have to pay the same borrowed amount plus the amount for interest.
If we do a comparison between these two types, we can come to a conclusion that dealership financing is simple and brings more ease to the borrower in comparison to banks. In house dealers also provide the facility of loan and their rules are simple. Buying a car is not a big deal when we have such options. However, we should keep certain things in mind like the rules and regulations, legislative procedure of buying a car in your own name, total price including the interest amount and the time during which you can repay the whole amount. If you do not want to pay huge amount every month, you can give more percentage of the cost as down payment. In this way, the installment amount will decrease and you will have to pay less. You can have a look at in house auto financing Houston if you want to buy a car and you are short of cash. Other options like trade in and bad credit consumer lending is also available on easy terms. Research about a trusted dealer and book your dream car before it is too late.