When you are in the market for a new car, one of the most important considerations is financing. Many Miami Toyota dealerships offer competitive financing options, but, if you are like many people, you may be a bit confused as to what this actually means. How can dealerships offer financing if they are not financial institutions? Will you get a good rate when you finance through the dealer? If this describes your current state of mind, read on for some basic information.
First of all, Miami Toyota dealerships do not actually finance the cars themselves. Rather, they have a list of financial institutions that they work with to provide customers with financing options. They do this as a service, and customers are not obliged to use these options. If they choose, they can arrange other financing with a bank, credit union, or individual. Similarly, Miami Toyota dealerships do not approve the loans themselves; rather they hand your information to the financial institutions who review your credit rating and related information. Some dealers will screen your credit information prior to purchasing via one of three credit reporting agencies. This insures that you could theoretically qualify for the car you intend to buy and that they are not wasting their time helping you shop for a car you could never purchase. This pre-screening, however, is not the same thing as approval.
Once your credit rating goes to a bank or lending institution for approval, you will be classified in one of three categories. A “prime customer” has a credit rating above 700 or 720. If you are a “prime customer,” you are considered a reliable investment and will be given the best interest rate. If your credit rating is between 620 and 680, you are a “near-prime customer,” and your interest rate will be up to 5% higher than that of a “prime customer.” If you have a credit rating below 620, you are a “sub-prime customer.” You will find it very difficult to get a loan, and if you are able to do so, it will have a very high interest rate.
With all this in mind, why get financing through Miami Toyota dealerships rather than an unrelated financial institution? The biggest advantage to dealer financing is the convenience. It is essentially one-stop shopping; you can get your car and your loan in one place without scrambling around trying to coordinate everything. And because the dealership is handling the financing, you don’t have to worry about communication issues. Also, unlike bank or credit union loans, dealership financing can be arranged on nights and weekends when the vast majority of car purchase happen. Finally, Miami Toyota dealerships can offer good interest rates and manufacturer specials.
For more information or to find out about competitive financing options and interest rates, talk to your local dealership.
South Dade Toyota is one of the best and fastest growing Miami Toyota dealerships. We offer the latest makes and models as well as a huge selection of pre-owned vehicles. In addition, we are proud to provide competitive financing, parts and services, short term rentals, and leasing options.
