Many people purchase a vehicle, motor home, boat, or ATV after doing a ton of research. They generally know the color, make, model and edition that they want. It’s interesting to me that they would do all of this research on their purchase, but still just walk in and take whatever financing option the dealership offers. I can’t sit here and say that a bank or financial institution can always provide better rates and terms, but frequently they can. My advice is to at least do some research on the lending options while searching out your new toy. I will give you the steps needed to purchase through your bank.
Timing – The most important thing to keep in mind when financing through the bank would be to give yourself and the bank enough time to get the loan done. All too often the borrower comes in hours before going to the dealership and this is not enough time to get the deal done. The borrower then ends up having to settle for whatever loan the dealership is offering. Generally speaking, allow your bank a couple days to approve you.
Pre-Qualification – now that you have reached out to your banker in advance, you need to have them pre-qualify you. They will take an application to make sure your credit and income is in line for you to make the purchase. They may need some of your financial information that I have discussed in previous blogs but it should be a fairly simple process.
Shop – Once you have the green light that you are approved by the bank then go out and shop for what you are looking for. Pick out the car, truck, boat, motorhome, or ATV and let the dealer you are pre-approved through your bank. Tell them that you need to have them send the purchase contract over to your financial institution. Once the bank has the purchase contract we can cut the check for the dealer. Usually once the dealer knows that you are pre-approved they will draw up their paperwork for the vehicle and let you leave with it. The bank will take care of issuing payment to the dealership.
Financing through your banking institution may take a little bit longer than just walking into the dealership, but if you can get a better rate then it will be a valuable choice for you. On the flip side, if the dealer is offering 0% interest on the loan then you should jump on it, but with a rising interest rate environment that is less likely. As always talk to your banker if you are in the market for a new vehicle or toy and see if it is something they can help facilitate.
Please leave a comment or contact me with questions.