difference between bank loans and dealer loans

Clients often wonder what the difference between getting a bank loan and                                gettting a car loan from a dealer . Of course I am referring to those with good credit. Going to the bank to get a car loan could take several days before getting results. Usually they will ask you to book an appointment with a financial advisor or a loan specialist and this could take 2 or 3 days to get in. After getting into see this loan specialist they will take a credit application from you and enter the details into their computer. They will need to send this information off to another credit underwriter to review the specifics. This underwriter will then either approve the car loan or decline the application. Prior to signing the deal the bank might ask for certain conditions to be met like proof of income by way of pay stubs, job letter, T4, notice of assessment. They also may ask for proof of rent or mortgage payments . Once all these conditions are met then you may be able to sign the deal and collect a bank draft. Some banks will ask for proof of vehicle purchase. This would be a bill of sale from a dealership. When applying at the bank for a bank loan you may need to secure the vehicle at the dealer with a deposit, then go apply for the loan. This whole process can take up to a week to complete. Getting a car loan from a dealer can be as fast as              getting approved for a car loan in under 1 hour . This would include the application and driving away. Keep in mind that this car loan at a dealer could very well be with the same bank you were actually going to apply with in person. Dealership car loans for good credit do so much volume with the banks that the banks will recognize the amount of business they would lose if the conditions were the same. It is not abnormal to have your car loan approved with no conditions except void cheque and copy of drivers license. Some dealer car loans don’t even require you to prove insurance before driving away. Again, I am speaking about clients with excellent credit.                Car dealerships in calgary with car loans can also offer extended asset protection, commonly referred to as extended warranty. Your own bank cannot offer this. Dealers can also offer life and disability insurance, which your bank can offer. Another point I would like to make it that some car dealerships can actually offer a low interest car loan and be lower than your banks rate. In my opinion, I would suggest going to a car dealership for a car loan as the process might be quicker, and with less conditions to meet.

Just my 2 Cents

-M

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