How to Finance a Used Car Through a Dealership

Published: July 9, 2021
Last updated: February 29, 2024

If you want to buy a used car and are looking for ways you can finance it, this article will be the ultimate place for your help. We will explain how you can get help from a dealership to finance a used car.

These are some things you want to consider while financing a used car through a dealership.

Estimated Value of the Car

You can get a rough estimate of how much the car you want will cost. That way, you will know beforehand how much you should be expecting in terms of payment and interest.

Documentation & Paperwork

Let the dealership handle all the documentation and paperwork regarding the car, how things will flow during your vehicle’s financing, and how the transfer process will proceed.

Higher Interest Rates

Look out for higher interest rates when financing a used car through a dealership because they may negotiate a bit higher interest rate than the bank or lenders and take the difference as compensation for handling the finances.

Make Informed Decision

The dealership may not provide you with all the information you want but only the information you need to get the process done. Get as much information as you can from the dealership to make proper, informed decisions.

More Interest Rates

You might get a higher interest rate for a used car in comparison to a new car. You can get promotional offers and discounts on new cars but you won’t get any on the used cars.

In-house Financing

Another form of dealership financing is when the dealership provides in-house financing. These dealerships are usually called buy-here, pay-here dealerships and they specialize in working with people with no or bad credit.

Which Way to Go?

If you have good credit, you should go to a bank to finance your car. If you don’t have a good credit score, you should opt-out for a dealership to finance you buying a used car because every time you apply for a loan, the lender runs a hard-query on your credit report.


Before getting a car, you should weigh in the pros and cons of the way you are taking. Go for bank financing if you want discounts and the best offers. Opt for dealership finance if you have a bad credit score and you can not go to the bank for a loan or financing your car.

Principal Analyst A mechanical engineer by trade, Bobby previously spent over 20 years at automakers giants, where he spent most of his time leading core technology design and operations and the development of new automotive models. He now devotes most of his time to be our go-to guy and Principal Analyst in Keep Driving.
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