What is in-house financing?

In house financing means the auto dealership is going to personally lend the money for you to purchase the vehicle. Many Canadians have misconceptions on who they borrow money from when they purchase a vehicle at a dealership. We will walk you through the two most common types of auto finance situations.

Non In House Financing

In this scenario the vehicle is purchased from the dealership. The money for this purchase comes from a 3rd party lender. These lenders can include a variety of prime lenders including, but not limited to:

  • TD Bank
  • RBC
  • Scotia Bank
  • Various Credit Unions
  • BMO
  • Ford Credit
  • Ally

There are also non-prime or subprime auto finance lenders:

  • CarFinco
  • Scotia Dealer Advantage
  • TD Non-Prime
  • Rifco

When you purchase the vehicle the money is given to the dealership for the vehicle from one of the above (or other) lenders. You then make payments back to the lender for the purchase amount plus any agreed on fees and interest.

In House Financing / Buy Here Pay Here Dealerships

Sometimes an applicant will not qualify for any of the available lender’s programs. For a lot of Canadians this the end of the line for options. That is of course unless the dealership has in house financing. When a dealership has in house financing they are going to lend you their own money. You will then be making payments back to the dealership each month as opposed to a 3rd party lender.

Pros of In House Auto Finance

  • Often able to obtain financing when other means have failed
  • Convenience of making payments back to the dealership you purchase vehicle from
  • Cons of In House Auto Finance
  • Vehicle choice may be limited
  • Down payment may be required (not always)
  • Dealership may not report payments to credit bureau (always check this as positive repayment history will help build your credit

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