 TITLE: How to Choose the Right Car Loan for You CONTENT: Financing Through a Dealership\n------------------------------\nThere are three types of financing you can get through a dealership: dealer-arranged financing, captive financing and \"buy here, pay here\" arrangements.\n### Dealer-Arranged Financing\nWhether you're working with an independent dealer or a franchise dealership that primarily sells cars from only one manufacturer, you may be able to take advantage of dealer-arranged financing.\nThe process works by having the dealer shop around for you based on your credit situation. They'll get quotes from multiple lenders, which you can compare to find the best one. This process can be convenient and save you some time, but keep in mind that the interest rate you get this way may be slightly higher than what you'd be able to get on your own. That's because dealers may offer what's called a \"buy rate,\" which includes compensation for handling the process.\n### Captive Financing\nMany car manufacturers own captive financing companies that finance cars made by the parent firm. For example, if you're buying a new or certified pre-owned Toyota from a franchise dealer, you may be able to finance your purchase through Toyota Financial Services.\nCaptive financing companies can often provide special financing promotions, especially on new models. But they're typically restrictive on which makes and models you can choose, and you may not get the chance to compare the offer with other lenders.\n### Buy Here, Pay Here Financing\nBuy here, pay here dealers specialize in working with people who have bad credit or no credit history at all and handle financing in-house rather than sending your contract to a lender.\nThis type of arrangement can make it easy to get approved if you're having a hard time getting financing elsewhere. But buy here, pay here dealerships tend to charge exorbitant fees and interest and often ask for a high down payment.\nThey may also lend you more than the vehicle is worth—something that's uncommon among other dealers—which could make your payments difficult to afford. As a result, repossessions are high with these dealers. END