Buy Here Pay Here San Jose
Have you ever considered getting car financing in San Jose? Well, our car dealerships have relationships with many more different lending institutions than a typical car buyer. While some of these lenders only deal with prime borrowers, others lend sub-prime borrowers. These include banks, private finance companies and credit unions.
These lenders have an arrangement with the dealers where they offer indirect loans but the car buyers cannot engage them directly. In other words, these type of financing can only be accessed through the car dealerships. So you should consider including these loans when shopping for car financing, but you need to be wary of any conflicts of interest.
How Car Financing Through A Local Dealer Works
The major reason our San Jose car dealerships want to assist buyers in getting these loans is because the lending institutions will allow them to markup a small percentage of the interest charged. This means the dealer will earn some of the profit on the loan as a reward for bringing in customers. For example, the lender may offer a 60 month loan at 6 percent interest rate but will allow the car dealership to to keep 1% of that. The dealer will make 5% profit from this difference.
Here in San Jose, CA, car dealerships have access to a wider range of financing options, it is possible to find a loan with lower interest rates or payments. For instance, if you are able to get a pre-arranged 5-year loan at an interest rate of 4 percent APR (Annual Percentage Rate), the dealer may get you an identical car loan at 3.75 percent APR. This is a favorable deal for you as it lowers both the monthly payment and the final price of the car.
How To Get A Great Deal When Car Financing Through A Local Dealer
When shopping for car financing, ensure you compare the amount of down payment and the length of loan repayment period. A car dealership may give you a car loan at lower interest rates, but requires a higher down payment or extends the loan repayment term by several months. While the monthly payment would be lower in this case, the overall cost of the car financing would be more.
There are some dealers that will offer you loans based on the markup percentage or profit they will get rather than the amount they will save you. In other words, they will get approvals from many different lending institutions at varying interest rates, but they’ll only present to you the one that will generate them the most money. You need to avoid such dealers. Ensure you see the actual approvals so that you are sure they’re giving you the best loan terms. We will help you with those those local buy here pay here dealers in San Jose that you can trust will treat you right.
Another way to protect yourself is to shop for your loan with us to get an attractive interest rate before going to the dealership. This will enable you to compare the interest rates offered by our approved dealers with the pre-approved loan. This way you can pick the dealer and lender that’s best for you and your needs. Apply for your loan and drive your new car home today!