Tag Archives: Dealership Lending

Direct Lending versus Dealership Lending

Financing a new vehicle doesn’t mean committing to a single set of credit terms. Direct lending and dealership lending offer customers more options than ever before. From knowing the credit terms in advance to pure convenience, finding the right financing option is much easier in the modern market. Here’s a quick rundown of direct lending versus dealership lending from our team here at Sierra Volkswagen.

Direct Lending vs Dealership Lending - Sierra Volkswagen - Ottawa, ILDirect Lending

Direct lending involves signing a contract with a financial institution, like a bank or finance company. The contract states that you agree to pay the loaned amount plus interest over a specific period of time. The loan is used to pay the dealership for a vehicle.

This type of lending offers a few advantages, namely the ability to compare credit terms among lenders. You can also ask the financial institution for more information and to negotiate more specific terms.

Dealership Lending

Getting a loan from a dealership is called dealership lending. As the name implies, you sign a contract stating that you agree to repay the amount financed plus a finance charge over a specific period of time. The dealership can then retain or sell the contract to another financial institution.

Dealership lending offers in-house convenience thanks to extended hours. A dealership’s relationship with surrounding financial institutions can lead to a range of options. Some automotive manufacturers even offer special financing rates through certified dealerships.

Visit or call us here at Sierra Volkswagen if you’d like to learn more about your options for buying your next car!