With in-house financing, the auto dealership personally lends the money for you to buy the vehicle. Many Canadians misconceive who lends them the finances to buy a vehicle at a dealership. Generally, there are two most common types of auto finance situations.
What is non In-House Financing
This occurs when a third-party lender provides the money for the financing, even if the vehicle is bought from the dealerships. The following lenders can cover a variety of prime lenders including, but not limited to:
Various Credit Unions
There are also non-prime or subprime auto finance lenders:
Scotia Dealer Advantage
On purchasing the vehicle, the money is given to the dealership for the vehicle from one of the above (or other) lenders. You then make payments back to the lender for the purchase amount, as well as any extra agreed on fees and interest.
In House Financing / Buy Here Pay Here Dealerships
At times, an applicant will not qualify for any of the available lender’s offers. For a lot of Canadians this is the last resort. That is unless the dealership does in house financing. When a dealership has in house financing they are going to lend you their own money. You will then be paying back to the dealership each month as opposed to a third party lender.
Merits Of In House Auto Finance
Often able to get financing when other ways have failed
Making payments back to the dealership you purchase vehicle from is convenient
Demerits of In House Auto Finance
There is limited vehicle choice
Down payment may be required but not always
Dealership may not report payments to credit bureau which will not help you build your credit
Speaking of credit, in-house financing may not always be lucrative. Canada Auto Experts deals with hand-selected dealerships that work with only major banks to get you the best interest rate and ensure that your credit is being built and reported along the way. Call 1-855-550-5565 today to get approved for a vehicle loan today!