Is It Better to Finance a Vehicle Through a Dealer or Bank?

You’ve found your dream car and you’re ready to drive it off the lot. But first, you have to figure out whether you’re going to close on your auto loan with a bank or directly through Toyota auto financing. There are benefits to each. The team at Beaverton Toyota will go over some of the key factors to consider so you can decide which financing option is the right one for you.

Interest Rate

Most people will want to shop around with several lenders to compare interest rates and find the best one. If you have an existing relationship with your bank or credit union, then your preferred financial institution may be able to offer you a competitive interest rate.

One benefit of auto financing with Beaverton Toyota, however, is that we work with multiple lenders in the area. That means we can do the work of shopping around for you. Rather than making individual calls or visits to several banks on your own time, we will reach out to multiple lenders on your behalf. In a matter of minutes, we can have several interest rate quotes for you to compare all at once.

Credit Score

If your credit score is less than great, you may have a difficult time securing financing. So if you’ve been turned down by other lenders, consider financing through your auto dealership. Beaverton Toyota has programs to help you rebuild your credit, and our finance managers will work with you to design the right financing package to suit your needs.

Ease of Closing

Another benefit of Toyota auto financing is that when you close with Toyota, we also take care of your registration and license plates so you can save yourself a trip to the DMV. No waiting in line and having to apply for your plates in person. We’ll hand them over to you at closing. You can even request custom plates if you’d like. Closing with a car dealership can save you the hassle of having to handle all this on your own.

So how exactly does it work? Well, if you’re purchasing a new Toyota and opt for Toyota auto financing, you’ll receive a temporary 90-day permit. Your registration and license plates will typically arrive in your mail within four to six weeks.
If you’re purchasing a used vehicle that doesn’t come with plates, you will receive a 21-day trip permit and 2 years of registration. When you choose to close with the dealership, you’ll often benefit from a more streamlined closing experience.

Loan Cost

Finding a lender offering a competitive interest rate is great, but you should factor in the overall cost of the loan into your decision as well. For instance, some lenders charge loan origination fees, or in the case of a dealership, dealer fees.

Regardless of whether you’re closing with a bank or auto dealership, you should inquire about any additional fees that will be assessed and factor those into the overall cost of your loan to determine which option will actually cost less. A lender offering you a lower interest rate may not actually be offering you a lower-cost loan in the long run.

Prepayment Penalty

Just like loan origination fees or dealer fees, you should also take into account any prepayment penalties that may be assessed if you pay off your loan early. Some people who have the opportunity to pay off their car in full before the scheduled loan payoff date will do so in order to save money on interest.

But you should inquire ahead of time whether you will incur any prepayment fees. This is something that may be reason enough to opt for a different lender or may simply be something you want to factor in before deciding to do an early loan payoff.

Toyota auto financing will never charge a prepayment penalty if you decide to pay off your loan early. While most lenders will not assess a prepayment penalty, it’s still a good idea to inquire about it before closing on your loan.

Rebate Offers

Some auto dealerships offer rebates that can save you hundreds of dollars. If you’re a recent college grad, military personnel, or Uber driver, you may qualify for a rebate with Beaverton Toyota. For instance, Uber drivers may be able to earn a $750 rebate on select vehicles.

If you’re a recent college grad, you may be able to save even more money by combining your rebate with our College Graduate Financing Program, which offers competitive interest rates. This has the potential to save you thousands of dollars in the long run.

If you are US military personnel (or in some cases, a household member), a US military retiree, or a US military veteran within two years of discharge, you may also qualify for a $500 rebate. You simply have to provide proof of military status at the time of your purchase, receive a qualifying salary, and secure credit approval from Toyota Financial Services through a Toyota dealer.

Sound like a good deal to you? That’s because it is. If you’re ready to apply for Toyota auto financing with Beaverton Toyota, we’ve made the process quick and easy. Simply fill out our online form to start the application process.

You can apply to finance or lease your vehicle through our secure online portal in just a few easy steps. Once you’ve submitted the form, we’ll follow up with you to let you know which financing options are most well-suited to your needs.

The experienced team at Beaverton Toyota not only wants to help you find a new set of wheels. We also want to help you get the best deal. We’ll work with you to find it, whether it’s closing on your auto loan with your preferred lender or with us.

Tags: Auto Financing, Auto Loan, Toyota Financing
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