Car Financing Options: Which One Is Your Preference?

There are financing options to choose from when planning to purchase a car. It is usually offered by a bank or car dealership, depending on the type of promo available that a purchaser wants to avail. These car financing options give the buyers the freedom to choose a payment scheme that suits their financial capabilities.

Ultimate car financing option

The in-house auto financing assistance is an option that the dealership gives to the buyer. It offers quicker approval that sometimes can go as fast as two hours. Some other advantages of in-house financing are the promos that come with it, including:

  • Free chattel mortgage fees
  • 1-year comprehensive insurance
  • LTO registration

But, in-house financing offers higher interest rates. It means that the borrower pays more over the SRP of the car as compared to bank financing.

in-house auto financing assistance


The downpayment normally starts from 20% – 50% of the actual pricing of the car. The remaining percentage and the interest rate are paid in monthly dividends. It is called monthly payment or what they call monthly amortization. It has a loan period that goes from 12-60 months.

The down payment amount and the loan period longevity depend on the lender’s approval.

Build credit

Anyone who purchased a vehicle through in-house financing at a car dealership has likely seen a big jump in the credit score – just a month or two after buying a car. Improving your credit score has long-term benefits that pay off outside the car loan. With better credit, it is easier to get lower interest rates on a car loan or mortgage.

Bank financing and in-house financing – which is better?

The better financing option relies on the financial capability of the borrower. When you have a strong relationship with a bank, bank financing is better. But, did you know that bank financing has negative feedback due to their delay in loan approval? If you are a purchaser, you don’t want to get trapped with these delays, especially if you are excited.

If you are in a rush and want to settle things like buying your favorite and dreamed car, you would choose in-house financing as the better option. You don’t want to wait for a third party to confirm the loan, you may pick the in-house financing. The all-in packages and some other freebies might cope with the higher rates it offers.

An in-house financing option will be the best candidate for your car purchasing experience.