Types of Auto Loan Funding

Auto loan funding can come in several forms. We offer a variety of auto loan funding products to meet our customers' unique needs. Here are the basic types of auto loan funding and an explanation of each.

Pre-Qualified Auto Loan Funding

With pre-qualified auto loan funding, you get approved for a certain loan amount before you even begin car shopping. Pre-qualifying will almost always put you in a better position to negotiate on a new car. Dealers like to do business with buyers who already have their auto loan funding ready to go because it makes the transaction faster. Pre-qualified auto loan funding will give you the upper hand in negotiations because the seller knows you are prepared to pay cash for the car you want. Furthermore, pre-qualifying allows you to lock in a fixed interest rate, so you protect yourself against rate fluctuations while you shop for your new car.

Auto Loan Funding Refinancing

Another type of auto loan funding is a refinancing loan. Refinancing is for people who already have a car loan but would like to lower payments or lock in a more favorable interest rate. If interest rates have fallen since you took out your car loan, you might consider refinancing to save money on interest costs. Using auto loan funding to refinance can lower your monthly payments, lock in lower, fixed interest rates, and extend the time you have to repay the loan.

Used Auto Loan Funding

Our lenders offer both new and used auto loan funding. If you are in the market for a used car, you stand to save a substantial amount of money. Used cars usually cost, on average, over 50% less than new cars. Keep in mind, though, that used auto loan funding rates tend to be slightly higher than the rates for new cars. New car financing also typically allows buyers to finance the car over a longer period of time than they could with a used car loan. Consider these trade-offs when deciding whether to buy new or used.

The Truth about Dealership Financing

Unfortunately, for the sake of convenience, the vast majority of new car buyers get their auto loan funding from the dealership. Though convenient, this is a costly and unwise choice. Dealerships specialize in selling cars, not bringing you the best deals on auto loan funding. As a result, dealerships often make huge profits on the financing of the vehicle, even more so than on the actual sale. Financing through an independent, third-party lender is almost always your best choice for auto loan funding.

For tips on getting the best deal on your financing, see our Save Money on Auto Loan Funding page.