Should I use dealer financing or get pre-approved at my bank?
Buying a used car next month. Credit union pre-approved at 5.75% for 60 months. Should I take that or let the dealer try to beat it? I've heard dealers sometimes offer better rates but I'm worried about credit pulls.
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asked 7 Feb 2024, 2:36 am by Amy F.
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Take the pre-approval but let the dealer try to beat it. Dealers work with multiple lenders and can get surprising rates. Important: multiple credit pulls in a 14-day window count as one inquiry. So don't worry about the pulls. Just make sure they don't run credit until you've agreed on vehicle price.
If dealer beats rate but loan term is longer, calculate total cost. 4.9% for 72 months costs more total interest than 5.75% for 60 months on same amount. Compare total cost, not just rate.