Dealer Finance vs Bank Loan Calculator
CalculatorCompare dealer finance offers with bank or credit union car loans
Dealers make money on finance, but sometimes their rates are competitive. This calculator compares dealer finance with bank or credit union loans to find the true best deal.
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Real-World Examples
Low Rate vs Discount
$35,000 car: Dealer offers 5.9% finance. Bank offers 7.5% but dealer reduces price by $2,000 if you use external finance.
Inputs Used:
Dealer finance: $38,300 total. Bank with discount: $36,800 total. The discount makes bank financing cheaper despite higher rate!
Frequently Asked Questions
Glossary
How to Use
- 1Enter the vehicle price and deposit
- 2Add the dealer's finance rate and fees
- 3Enter your bank or credit union quote
- 4Include any price discount for external finance
- 5Compare total costs
Key Information
- Dealers earn commission on finance - typically $500-$2,000
- Promotional dealer rates can beat banks (but check terms)
- Banks often have lower fees but may have slower approval
- Some dealers discount the car if you don't use their finance
Pro Tips
- Get pre-approval from your bank before visiting the dealer
- Ask the dealer to match your bank rate - they often can
- Check if 0% or low-rate deals hide higher car price
- Credit unions often have the best rates but stricter criteria
Avoid These Mistakes
- Accepting dealer finance without comparing alternatives
- Focusing on low rate without seeing inflated car price
- Not asking about price discount for cash/external finance
- Ignoring fees when comparing rates
Disclaimer: This calculator provides estimates only and should not be relied upon for financial decisions. Interest rates, fees, and policies change frequently. Always verify information with lenders directly. This is general information, not personal financial advice. Consider seeking advice from a licensed mortgage broker or financial advisor.
Last updated: February 2026