Understanding your auto finance options

Couple in convertible car purchased with finance


Find a loan that runs as sweetly as your new car

There are plenty of car loan options out there, and many of them may be suited to you. Knowing where to look, however, is the starting point that makes it much more likely you’ll end up with the right one. This overview outlines the main avenues you can pursue as you seek approval for new or used auto financing.


Traditional dealerships

Getting your financing through a dealership is a common approach as it allows you to buy a car and arrange credit at the same time. The dealer will source the loan from a third party, which makes it an indirect form of lending. They may also add a percentage point or two to the interest rate to compensate themselves for their role in the process. Once you’ve signed the contract, the dealer could keep the loan or sell it to another company.


Banks, credit unions and finance companies

Alternatively, you could get your car loan directly from the lender, be it a bank, credit union or finance company. You might opt for a brick and mortar premises or go online with a lender such as RoadLoans. Either way, direct financing enables qualified applicants to get approved for their loan before visiting the dealership. With preapproval, you can shop for a car already knowing the terms of your financing, which may help you stay on budget and negotiate firmly on price.


A word about ‘buy here, pay here’ dealerships

Another option for car finance is a “buy here, pay here” dealership. This kind of dealership is different from a traditional dealer because it supplies the cash for the financing itself. Often used by buyers with bad credit,* the Consumer Financial Protection Bureau warns that interest rates can be much higher than at other lenders. The dealership also may not report your payment history to a credit bureau, so your credit score wouldn’t see the benefit of timely payments.


Finance options for a range of credit types

Your credit score will typically have a significant impact on the terms of any loan offer you receive. Consumers with poor credit can generally expect less favorable terms, such as APR, than those with better credit. If that’s your situation, you may find it pays to work with a company that has the expertise to match your needs.

RoadLoans is a full-spectrum lender that has a wealth of experience in this area. We accept applications from consumers with a broad range of credit, including profiles affected by repossession and discharged bankruptcy, and provide the same easy process to all our customers. If approved, it begins with multiple loan offers tailored to your needs. Simply make a selection, print your loan packet and visit the preferred dealer listed inside. Your dealership will be able to show you select models meeting our high standards and the requirements of your financing.

See if you’re approved. Apply for flexible car loan options online.


* “Bad” or “poor” credit generally is considered a FICO score around 600 and below by sources including the Consumer Federation of America and National Credit Reporting Association (reported by the Associated Press), Bankrate.com, Credit.com, Investopedia, NerdWallet.com and others. The Congressional Budget Office identifies a FICO score of 620 as the “cutoff” for prime loans. FICO scores are not the sole factor in lending decisions by RoadLoans.com and Santander Consumer USA.


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