Financing Your Car Through The Dealership vs. A Credit Union

Published on July 18th, 2019

Deciding how to finance your car can be a difficult decision:  you can either choose to use a credit union or bank for a direct auto loan or go through the dealership. 


What’s The Difference?

One of the differences between credit union and dealership financing is that when requesting auto loans from our credit union near Northlake, you will deal directly with Leyden Credit Union.  However, with a dealer, there will be additional handling of your information. 


Credit Union

When deciding to apply for an auto loan through Leyden Credit Union, you will work directly with our credit union. Financing through a dealership can be more costly.  It may initially seem more convenient since you are already at the dealer, however you can apply online beforehand with Leyden Credit Union to get preapproved. You can receive a full quote for your auto loans with our credit union near Northlake based upon several factors, such as the model year of the vehicle, your current credit score, and the term of the loan. By getting preapproved, all you have to do is negotiate the price of the car with the dealer. 



When deciding to finance your new car with a dealership, the dealer will collect your information and it will be sent to their prospective auto lenders, including the financing company owned by the automaker. The process of receiving your auto loan through a dealership requires some middle-men handling your information. Dealer-arranged financing comes along with an initial buy rate of the loan that could include compensation for the dealer. In the long run, getting an auto loan through your dealership could add more interest and be more costly than obtaining financing through a credit union. 


Whether it be through a bank or through the car dealer, both are trying to generate profits for their stockholders.  Credit unions do not have outside stockholders; they are owned by their account holders. Because of this, credit unions return their profits to their account holders in the form of generally better rates.  As a result, loan rates from Leyden Credit Union are very competitive and are among the lowest in the market. 


For more information on auto loans near Northlake, come into Leyden Credit Union or visit our webpage.

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