When you’re in the market for a new car, you should always head to a local bank first to finance your purchase. Doing so will save you money, give you options, and help you avoid getting taken advantage of by the dealer. Once you’ve been preapproved for a car loan, you can head to the auto dealer with confidence and advantages.

Why You Should Get Your Car Loan From a Bank

1. Sets a Budget

Car dealers will usually try to talk you into paying more money than you planned to spend on your new automobile, whether on a different vehicle or by selecting a model with extra bells and whistles. However, when armed with a car loan through a bank, you’ll know the exact maximum amount that will fit your budget.

2. Removes the Pressure

If you go straight to a dealership, they may pressure you to finalize the purchase before shopping around. Part of their sales strategy is to convince you there’s no need to go to a local bank for financing. By turning to a financial institution first, you’ll find the whole car-buying experience less stressful, as the dealer won’t have as much reason to rush you.

3. Provides Leverage in Negotiations

With preapproved financing in hand, the negotiating power shifts to you. You can go from dealer to dealer looking for the lowest price while forcing the dealers to negotiate against each other. Once you remove the financing aspect from the equation, the only number you have left to worry about is the final cost of the car.

4. Avoids Hidden Fees by Dealer

It’s not uncommon for dealers to tack on hidden fees while arranging the loan. For example, a common dealership maneuver is a commission fee that’s paid for by a marked-up interest rate. When you go to a bank, on the other hand, you avoid these markups.

5. Forces Dealer to Compete

After you make it known that you have a preapproved car loan from your local bank, the dealer will often attempt to beat it by offering a lower interest rate. While the financing from the bank will usually be a better deal, you will sometimes find that motivated dealerships offer competitive rates that make you a winner.

If you’re looking for an auto loan, consider Putnam 1st Mercantile Bank in Cookeville, TN. Locally owned and operated, this local bank is the go-to source for many residents and businesses in Putnam County for all types of loans and other banking needs. If you value personalized service and favorable rates, this banking institution offers a comprehensive array of loan services to meet your needs. Call a specialist at (931) 528-6372 or visit their website for more information.