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Can a car dealership refuse outside financing?
I went to a car dealership and found a car I liked. The salesman told me that they don't accept outside financing. Can a car dealership do this?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
They sure can. Dealerships can refuse any type of financing for any reason. It’s not immoral or unethical; it’s just business.
That said, car dealers usually refuse outside financing if they’ve lowered the price enough. To make up for this discount, they want you to finance with them to recoup that money. It’s a simple break-even policy from their standpoint.
You can always walk away from the deal if it doesn’t feel right or if the term is longer than you want, like a
72-month car loan
.Always trust your instincts and don’t sign anything that seems like a poor deal.
When you do find the right deal, remember that lenders require full coverage. It’s a good idea to find
car insurance
before signing on the car loan, or else the dealer may require you to use their insurance, which can be quite pricey.Just like you shopped around for the best car loan rates, be sure to shop around for the best insurance rates. Try using
Jerry
app to make comparison shopping easy. Jerry compares quotes from the 50+ top providers
and delivers the best deals to your phone in minutes.View full answer
- Gregory R.
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Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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