What is the Difference Between Direct vs. Indirect Finance?

If you’re shopping for a new car around Inver Grove Heights, you likely need an auto loan. Do you know the difference between direct vs. indirect finance and why it matters? In this helpful guide from Mauer Chevrolet, the finance team explains the difference between direct vs. indirect finance and the impact on your finances. Learn more here, and reach out to our finance specialists if you have questions. 

Direct vs. Indirect Finance

So, what is direct vs. indirect finance?

  • Indirect finance occurs when you shop for loan packages through a third-party lender. Typically, you apply for a loan at the dealership and see what options are available to you after you’ve selected your vehicle.
  • Direct financing occurs when you apply for an auto loan directly from the lender of your choice in Eagan, such as a bank or a financial company. You get a personalized loan and interest rate and get pre-approved, so you know how much you can spend at the dealership.

Advantages of Direct Financing:

The financing team at Mauer Chevrolet, near Woodbury knows that when shopping for auto loans, people need options that work for them. So, which is better for you, direct vs. indirect financing? Check out the advantages of direct financing below:

Direct Financing

  • Advantages: The main advantages of direct financing are flexibility and customization. Apply for as many loans as you want, before or after you shop, and have full control over the process while working directly with your auto loan lender.
  • Disadvantages: The direct finance process takes a lot more time and energy, and you’ll need to do research to determine the best choice for your unique needs.

Indirect Financing

  • Advantages: Indirect financing usually involves more parties than working directly with a lender, but having a team working on your behalf can speed up the process. Your dealer can run your credit multiple times and search for various loan options at once.
  • Disadvantages: You may pay a little extra for the convenience and speed of indirect financing.

Get Your Next Auto Loan from Mauer Chevrolet

Now that you know the basics of direct vs. indirect finance, if you have questions, feel free to contact the finance specialists at Mauer Chevrolet. You can start the financing process for indirect financing by completing a credit application online. What are you waiting for? Reach out to us today!


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