| For an average person, buying a car from | | | | Disadvantages |
| one's own resources is not very feasible. | | | | |
| With the kind of prices that new cars and | | | | Certain information is kept under wraps by |
| used cars command, financing becomes a viable | | | | the financier and not disclosed to the |
| option. You will find many finance companies | | | | borrower. Financial information is available |
| offering auto loans including the dealer from | | | | on certain slow selling models that normally |
| whom you intend buying your car. Finance may | | | | have a low resale value. These are also |
| come easy, but there are complications | | | | limited to dealer stock. In this case, you |
| involved in the process. You may later find | | | | may have limited options to color and style. |
| yourself in a fix over a contract that you | | | | |
| cannot afford. | | | | Your finance agreement may involve hidden |
| | | | fees. The financing options may have larger |
| Advantages of Dealer Financing | | | | prepayment penalties resulting in higher down |
| | | | payment. You may also have to bear higher |
| The main advantage of dealership financing is | | | | late fee penalties for payments made beyond |
| that of convenience. Financing is quick, as | | | | the due date. You may also have to pay a |
| it is as easy as walking in the car showroom | | | | higher interest rate in case of late payment. |
| and driving out in a brand new car. | | | | |
| | | | Most dealership loans are compounded interest |
| As compared to other forms of finance, | | | | loans, so work out the actual interest rate. |
| dealership finance is fast. There are lesser | | | | |
| hassles involved. | | | | 0% interest rate offers are offered to |
| | | | eligible borrowers, which is a small group of |
| Dealership financing comes at competitive | | | | persons. According to a study, very few |
| interest rates, if you qualify certain | | | | people actually get the 0% rate on 0% offers. |
| conditions. | | | | This depends upon the credit rating and many |
| | | | do not qualify. |