As we near the end of another summer, many people start getting the itch to purchase ayoung woman holding keys to a new financed car new vehicle. With that decision comes a number of challenges and choices.  New or used? What year? What color? What model?

Another question that inevitably comes up is ‘How do I pay for it?’ For most of us, a vehicle purchase typically involves financing of some sort. Dealerships will more than likely encourage you to finance through them. The car buying process can be very drawn out and stressful, and while it may seem like a convenience that the dealership can offer you financing ‘on the spot’, going with it may not always be to your advantage.

Monthly Payment Mirage

One big disadvantage of using dealer financing is that dealers will often focus on what your monthly payment will be rather than the cost of the vehicle. Yes, stretching the loan out a few more years will decrease the monthly payment, but it will also result in you paying more interest over the life of the loan. It may not be the best solution for your situation, and you may wind up spending more on the vehicle than you’d originally planned.

You See What They Choose to Show You

When you’re sitting at the desk of a salesperson, the dealership will likely present you with several financing options that they will work into the deal. This puts you at a few disadvantages. The first – you don’t know if you were approved for more loans than they are choosing to show you. Yes, the dealership wants you to get a loan to buy a car from them, but they also make money on the financing side. There’s a chance that they are only showing you the loans that are most profitable for them. You could be qualified for better terms than what they are showing you.

‘Mystery Lender’

When financing through a dealer, you’ll be presented with a number of loans from different companies. Some from places you may have heard of, others that could be completely new to you. Either way, there’s a good chance you won’t have any first-hand experience working with them. What will their customer service be like? What support options do they offer? Will you be just another number to them?

Go With What You Know

One way you can eliminate some of the stress of vehicle shopping is to talk with your American Federal Banker before you go. This offers a few advantages over dealership financing. Your Banker can take the time to discuss your options with you and help you decide which terms best fit your situation. Likewise, if you have any future questions about your loan, you know you’ll be dealing with people you know personally who you can call directly – not some giant call center.

If you’re in the market for purchasing a vehicle, give your American Federal Banker a call and ask about getting pre-approved.