In House Financing

In House Financing


In-house financing is a type of financing in which a dealer offers car buyers a loan, allowing them to purchase a vehicle from its showroom. In-house financing removes the dealer's dependence on the financial sector for providing the buyer with funds to complete a purchase deal. Get information on in house financing here

If you receive a “pre-approved” offer, it means that a lender has decided to give you a loan, when you purchase a car. When you have a problemed credit history to get a loan from traditional financial institutions, you can take this offer, make a deal with the dealership and get in-house financing.

In-house financing can be little complicated. Whenever get a preapproved offer, you should be clear about the terms “approved” and “approval” before approaching for it. Both terms do not have the same meaning.

Let’s see what those terms, in reality, mean for the consumer. The meaning of these terms varies from dealership to dealership. Depending on the situation, those words can mean immensely different things. Before considering an in-house financing, make sure that you understand the implication of these terms so that you are fully prepared to make your decision.

In-House Financing Scams

The scams attached to in-house financing our twisting of the terms approved and preapproved. These terms are used for different situations.

Approved to Sell Used Cars

A seller that has been allowed as an official seller by certain manufacturers uses this term. This type of dealership has higher typical standards for quality. In this case, “approved” means that you can put more trust in the dealership.

Watch out for Tricky Loans

One thing to watch out for when you’re trying to get approval from the in-house financing department at a car dealership is a tricky loan. In this case, the dealer will allow you to leave the lot with a new car before official approval of the loan. When you drive off the lot without finalizing the deal, you open yourself to a lot of troubles. You may be forced to pay extra. As you were using the car you cannot return it at this point.


The risk with a tricky loan is that the dealer will call you within a few days to inform you that your loan is not approved and you have to pay a huge down payment or an increased interest rate.

Be careful, make sure that your financial deal is completely finalized before you take the car home. The best practice is this, always bring a witness with you at least during the closing of the deal.

Be aware of the Used Car Dealers That Don’t Report to Credit Bureaus

Some dealers use the in-house financing to help you get started but do not report your payment plan to the credit bureaus. This will stop building your credit score. Discuss with the dealer and make sure in writing that your in-house financing plans will be reported to all three top credit bureaus so that your credit score improve when you make your payment on time. In broad-spectrum, in-house financing can be a great option if you are pursuing to obtain approval from an auto lender. Just be careful, watch out for tricky loans and insist on reporting your loan to credit bureaus so that you stay on track with your finances.