Why Finance with a Dealership vs. a Bank?
You have a few options when it comes to financing your vehicle, should you do it through a dealership or a bank? You could take out a line of credit with a bank, which comes with uncertain rates, isn’t specialized and may need to be secured, or you could finance with a dealership, which comes with years of specialized experience, specific knowledge of the industry and connections to get you the best rates. Dealership financing should be your prime choice when purchasing a vehicle, whereas a line of credit is best for generalized borrowing in an emergency situation. Read on as we outline the pros of the dealership process against the cons of borrowing from a bank for your vehicle.
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Dealership Specialization in Vehicles
The prime reason to finance your vehicle with a dealership such as ours at Davey Auto Sales is the decades of experience we bring to the table working specifically in automotive financing. Not only do we have years of tenured time helping those from a variety of situations, but we’ve also developed strong relationships with lenders in the area to get you terrific rates that are kind to your needs and budget. Vehicle financing is a dealership’s speciality, at Davey Auto Sales we’re built for it, having served the Oshawa area in this exact area since 1977.
Uncertainty with a Bank Line of Credit
A line of credit is a type of loan that you receive from the bank, acting as an amount of money that you’re able to access as you need it. This money will, of course, have to be paid back over time, with interest. Due to its typically variable interest rate you often may not not know how much you’ll eventually have to pay back. That means it’s not a good way to purchase a car, especially when specific auto loans exist exactly for that case. Financing with a bank through a line of credit isn’t made for vehicles, rather for those who have varying expenses each month as a cushion when they’re not sure how much money they require every month.
Cons of a Line of Credit
There’s even more reasons why a line of credit isn’t an optimal choice when financing a vehicle. The best scenario for a line of credit is in case of emergency, not when you have a tailored loan path like dealership financing with an auto loan. Below are a few more (and expanded) points as to why you shouldn’t choose a bank over a dealership:
- Fluctuating interest rates could mean higher payments
- A line of credit is a general way of borrowing money, not specific to the uniqueness of vehicle purchases
- Most credit lines require them to be secured, such as being tied to your house in the form of a second mortgage.
- A line of credit doesn’t give you the specialized auto team behind it like a dealership does, who know all the ins and outs of automotive financing.
- A line of credit should only be treated as a last resort when you need emergency money immediately, but know will be able to pay off in the future.
When could a Bank Loan be a Good Idea for a Vehicle Purchase?
On the whole, a specialized loan for the type of purchase you’re making is always ideal. You wouldn’t take out a line of credit to purchase a house, you’d get a mortgage. However, there are always certain circumstances where the best practice isn’t the right fit. The primary situation where a bank line of credit may be favourable for a vehicle purchase is if you’re purchasing something that requires substantial repairs or restoration, as you can potentially be approved for the total cost required to complete this project. However, as our vehicles come as part of our Davey Value Program, this type of financing isn’t the right fit for one of our used vehicles.
Finance with Davey Auto Sales
Don’t bother with financing through a bank when you have the dedicated and skilled Davey Auto Sales team at your disposal. We’ve been serving the Oshawa area since 1977 for used vehicle financing, helping those from a variety of credit backgrounds and budgetary requirements get a vehicle they want and a loan with rates that work for them. No matter the credit or financial situation, we can help! Contact us, today, to get the process started, fill out our credit application form or just get in touch with any questions you may have.