Automotive

Bank Vehicle Loan or Car finance loan?

  • Last Updated:
  • Jun 6th, 2021 2:42 pm
[OP]
Sr. Member
Jul 22, 2020
683 posts
108 upvotes

Bank Vehicle Loan or Car finance loan?

Hi,

What are the pros and cons of getting a vehicle loan thru a bank vs. Directly from the financial institution of the vehicle manufacturer?

Has anyone been thru the process?

Tia!
6 replies
Deal Expert
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Jul 30, 2007
31522 posts
18235 upvotes
Toronto
Car manufacturers finance rates may be cheaper than banks (depends on certain models)
Deal Fanatic
Dec 24, 2005
5747 posts
1559 upvotes
you will have a much easier chance of getting approved with way less running around from you by financing in the dealership. probably at a better rate too.

and they will use your same bank to do it.
Deal Addict
Mar 3, 2018
2868 posts
3172 upvotes
GTA
Some manufacturers offer cash rebates or discount if you pay with cash. Which you would be doing with a bank loan. Manufacturers pay financial institutions to buy down the interest rate they can offer.
Deal Guru
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Jul 12, 2003
12329 posts
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Toronto
Worse idea is to get a bank loan to finance a car.
Interest rate will eat you big time.
Retired Forum Moderator February 2009 - June 2015
Deal Addict
Dec 20, 2015
4031 posts
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Toronto, ON
MP3_SKY wrote: Worse idea is to get a bank loan to finance a car.
Interest rate will eat you big time.
Unless you have HELOC which interest rate will be a lot lower and easier to pay off!

I just paid off my Tesla and my interest rate was 1.6%
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Deal Guru
User avatar
Jul 12, 2003
12329 posts
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Toronto
lamboman wrote: Unless you have HELOC which interest rate will be a lot lower and easier to pay off!

I just paid off my Tesla and my interest rate was 1.6%
Yes in some circumstances you can be better off finance it elsewhere, just like your scenario.
Majority of the case, dealership offer better rate than the bank.
Retired Forum Moderator February 2009 - June 2015

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