A Guide to Dealers with In-House Financing

dealers with in house financing

Buying your car from dealers with in house financing should be something you should consider when you have a bad credit history. While getting a loan from your bank or credit union is one financing option, some used car dealerships also offer in-house financing. This allows buyers to get a car loan directly through the dealership. Here’s an overview of what you need to know about dealers with in-house financing:

What is In-House Financing?

The term “in-house financing” refers to a car dealership acting as its own bank for the purpose of providing loans to customers. Dealers with in house financing handle the entire loan process, from application to paying off the loan. This allows them to approve buyers who might not qualify for traditional loans and potentially offer lower interest rates.

Pros of Dealers with In House Financing

There are some potential advantages to financing a car through the dealer:

  • Easier approval: Dealers may be more flexible than banks for buyers with less-than-perfect credit. Their goal is to sell cars, so they have the motivation to find ways to approve loans.
  • Faster process: There’s less paperwork because you’re not applying to an outside lender. Loan approval can sometimes happen in an hour or less.
  • Lower payments: Without a third-party lender, dealers can sometimes offer lower interest rates and monthly payments. Always compare rates first before assuming in-house is cheaper.
  • Flexible terms: Dealers may offer extended loan terms, allowing lower monthly payments. This lets buyers purchase more expensive vehicles.

Cons of Dealers with In House Financing

However, there are also some drawbacks when buying cars from dealers with in house financing that you should be aware of:

  • Higher interest rates: Unless you have great credit, interest rates are usually higher than rates from credit unions and banks. Always compare options.
  • Limited financing options: You can only finance through that particular dealer rather than shopping around for the best loan.
  • Penalties for early payoff: Many dealer financing contracts include prepayment penalties if you pay off the loan early. Make sure to check the contract terms.
  • Pushy sales tactics: Some dealers will use their financing offers to pressure buyers into purchases, tacking on extras like extended warranties. Don’t feel forced into add-ons you don’t want.

Questions to Ask About In-House Financing

If you’re considering dealers with in house financing, make sure to ask the right questions first:

  • What are the interest rates and loan terms? Get specifics to properly compare options.
  • Are there prepayment penalties or fees? You’ll want to avoid these if possible.
  • Does the monthly payment fit my budget? Don’t commit to more than you can afford long-term.
  • Does the loan have flexible payment options? For example, can you pay weekly or bi-weekly instead of monthly?
  • What benefits are included, like extended warranties? Make sure add-ons improve value.

The Bottom Line

Going to dealers with in house financing can be an easy and fast option for some buyers. Just make sure to compare interest rates and terms with other lenders first. Avoid penalties and rigid payment schedules if possible. If the dealer offers competitive rates, in-house financing can be a convenient way to pay for your new car. But don’t let financing options distract you from negotiating the best price on your vehicle purchase.

Experience Hassle-Free Used Car Buying

Bad credit? No problem! Carfect offers in-house financing and a huge selection of quality used cars and trucks. As one of the top dealers with in house financing we offer a flexible buy here pay here program that makes owning a vehicle easy, even with less-than-perfect credit. Visit Carfect online today to find the right car through their fast and simple financing process.


Most car dealerships with in-house financing require a minimum credit score, stable income, and a down payment. Exact requirements vary, but scores above 600 and 10-20% down are common minimums. Dealers want to confirm buyers can afford the monthly payments.

Car dealerships with in-house financing make it easy to get a car loan quickly. They have the motivation to approve buyers that banks may deny. Just beware of very high-interest rates compared to other lenders.

Pros of a used car lot are quick loan approvals, and flexible terms that help people with credit challenges buy a car. Cons are higher rates and pushy sales tactics, so read contracts carefully and resist unnecessary add-ons.

The best way is to apply and have the dealer run your credit. Even with subprime credit, most dealers will work to get approval through their in-house financing options.

Not necessarily – compare options first. Dealer financing can still be competitive and offers unique flexibility, so don’t rule it out before exploring the specific loan terms.


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