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Where to get your car loan: Bank or dealer?

Before the test drive it’s a good idea to understand—and compare—your financing options

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You’re ready to buy a car, but first you need to figure out the right way to finance it. The good news is that you have options: You can get your car loan from a bank or credit union, or you could go through the dealer. Both have their benefits and considerations, and it’s best to be informed about financing options before you ask for the keys.

Car financing at a glance

Bank

  • It’s a good idea to lock in a bank loan approval before shopping for cars.
  • You can use a bank loan at many dealerships.
  • Being a bank’s existing customer may help you get approved.

Dealer

  • You’ll likely choose your car before applying for a loan directly from the dealer.
  • Dealers may offer incentives to use their financing.
  • You won’t get to choose the lender who services your loan.

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