Dealer finance is convenient and sometimes aggressively priced, particularly on new cars with manufacturer support. Banks and non‑bank lenders can be more transparent on fees and often more flexible on structures. The right choice depends on the vehicle, your credit profile, the presence of balloons and early payout costs, and how quickly you need the car.
Where dealer finance shines
- On‑the‑spot convenience and bundled paperwork
- Promotional rates on specific models or plate‑clearance sales
- Potential for bundled incentives (service credits, accessories)
Where banks/non‑banks shine
- Clearer comparison rate disclosure and fee transparency
- Greater flexibility on terms and early payout policies
- Competitive pricing for strong profiles, especially with security
Key questions to ask either option
- What is the comparison rate and what fees are included?
- Is there an early payout fee or break cost? How is it calculated?
- Is a balloon required or optional? What are the refinance options at term end?
- Are there monthly account fees or package fees?
Negotiating tips
- Secure a pre‑approval; it gives leverage and a walk‑away option.
- Compare total cost at the same term and with/without balloon.
- Ask the dealer to beat a bank’s comparison rate, not just the headline rate.
Bottom line
There’s no universal winner. Take the path that offers the lowest total cost and the flexibility you need, verified by comparison rate and a clear understanding of fees and end‑of‑term options. Convenience is valuable—but make sure you’re not paying for it twice.