Financing Your Car: Should You Choose a Bank or Dealership?

Hillsboro Car Financing

Hillsboro Car Financing

When it comes to purchasing a car, unless you’re paying in full, one of the most critical decisions you will make is how to finance it. Typically, two main options are financing through a bank or a dealership. Both options come with their own set of advantages and disadvantages, and the best choice will depend heavily on your individual circumstances. Thankfully, the team here at Hillsboro Ford will give you an honest breakdown of both to help you make the best decision for your financial needs. 

Bank Financing

When you finance a car through a bank, you essentially get a loan from that bank to pay for the car. The bank will then hold the title to the car until you fully repay the loan. Here are some benefits and drawbacks of bank financing:


  1. Competitive Interest Rates

Banks generally offer competitive interest rates compared to dealerships, especially if you have a good credit score. The lower the interest rate, the less you will pay over the life of the loan.

  1. Preapproval

You can get pre-approved for a car loan at a bank before you even start shopping for a car. This gives you a clear idea of how much you can afford and allows you to negotiate with the dealer as a cash buyer.

  1. Flexible Terms

Banks can offer more flexibility with loan terms, allowing you to choose the length of the loan and the repayment schedule that works best for you.


  1. More Legwork

Financing through a bank can require more effort on your part. You have to apply for the loan, get approved, and then provide the bank with the necessary details about the car.

  1. Stricter Requirements

Banks generally have stricter requirements when it comes to credit scores. If your credit score is less than stellar, you may find it more challenging to get approved for a loan.

Dealership Financing

When you finance through a dealership, the dealer essentially acts as an intermediary between you and the lender. The dealer will help you fill out the loan application and send it to various lenders to get you the best possible loan terms.


  1. Convenience

One of the main advantages of dealership financing is convenience. You can choose your car and arrange financing all in one place, often on the same day.

  1. Promotional Offers

Dealerships often run promotional financing offers, such as 0% interest for a certain period or cash back on certain models. These offers can sometimes make dealership financing a more attractive option.

  1. More Accepting of Lower Credit Scores

Dealerships are often more willing to work with individuals who have lower credit scores. They may have relationships with lenders who specialize in subprime auto loans.


  1. Higher Interest Rates

Dealerships often determine the interest rate on the loans they offer. This means you could end up paying more over the life of the loan.

  1. Limited Lenders

When you finance through a dealership, you are limited to the lenders the dealership works with. This can sometimes limit your options and prevent you from getting the best loan terms.

So, What’s the Best Way to Finance a Car?

The answer largely depends on your individual circumstances. If you have a good credit score and are willing to put in a little extra effort, financing through a bank might be the best option. On the other hand, dealership financing might be the way to go if you prefer convenience or have a lower credit score. Regardless of which option you choose, it’s important to do your research and understand the terms of your loan before you sign on the dotted line. This will help ensure that you get the best possible deal and can comfortably afford your new car.

Looking for a Ford dealership you can trust in Hillsboro, NH? Look no further than Hillsboro Ford! As the leading Ford dealer in the area, we are proud to provide our customers with a unique business philosophy that puts your needs first. Our team of financial experts is here to help guide your car-buying decisions every step of the way, from free credit checks (that won’t affect your credit score!) to vehicle trade-in options and disappointment-free financing. So why wait? Visit us today and drive away in the Ford vehicle of your dreams!


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