Financing a Used Vehicle: Bank or Dealership Financing?

If you are looking to finance a used vehicle, then there is a lot that you need to consider before making your decision. There are many factors that go into the financing of a car, and it can be difficult for most people to decide which one will work best with their current situation. The first step in this process is deciding what type of financing you want: bank or dealership financing.

Financing through a Bank.

Financing through a bank or credit union involves you doing the work yourself and can help give you a better idea of how much interest you will end up paying for your car. It can also be helpful because it allows you to take out the loan directly from the bank, meaning that there are no additional fees that come with getting financing through a dealership or private company.

However, this process may not always work in your favor , especially if you have a poor credit score, or no long-term credit history. Because banks typically want borrowers with good to excellent credit scores in order for them to approve the loan, this may make it more difficult for people who don’t fit that description. Additionally, there are fees involved when taking out financing through a bank because they need an incentive to offer loans to people with poor credit.

Bank Financing for People with Poor Credit Scores.

If you have a bad or no long-term credit history, then bank financing is not the way that you should go because your chances of getting approved are very slim. If this describes your situation, then don’t worry—there is another way that you can get the car that you want without going through a bank.

Dealership Financing.

Instead of working with your bank to finance your vehicle, there is another option: dealership financing . This method will usually give you a better chance at being approved for a loan since dealerships have more flexibility in who they allow on their lots and who they give financing to. They also offer a much more relaxed application process than banks, which can be helpful if you feel stressed about the whole thing!

Although dealership financing is an excellent option for people with poor credit or no long-term financial history , it can come with a downside . For example, when taking out your loan through a dealership, you will usually end up paying a slightly higher interest rate because of how risky it is to give financing to people who have no credit or bad credit. But Dealerships have relationships with many banks and credit unions and can select the best option and interest available for your unique situation.


In conclusion, deciding whether to get bank or dealership financing is a big decision that should not be made lightly because of all the different factors involved in it. If your credit score falls into the “good” category and you are sure about what kind of car you want , then going through a bank may be the best option for you. If your credit score is not so great , or if you are unsure about what kind of vehicle to get, then it may be better for you to go with dealership financing because they will have more options available that fit into your situation .