It is very important to know that car dealers do not finance cars. They can arrange for the financing because they have tie-ups with many financing companies. They have the power to influence and affect your finance and the amount you pay for the financing. Dealers do business for cash Remember! Car dealers are not representatives of car manufacturers. They do independent business and are authorized franchise of one or more than one manufacturer. The manufacturer is not the owner of the dealers. Dealers generally buy car from the manufacturer taking "floor-plan" loans from bank or any finance companies. The banks charge interests on this loan and the dealer repays it by selling the car which also covers other expenses of the business. When a dealer sells a car he always does it in exchange of money that he receives either from the customer or the finance company or bank financing the customer.

A dealer does the preliminary check of the customer's credit history using one of he three credit reporting agencies. This is done to check the customers credit history - whether the customer had any serious credit problems in the past. If any problem is found then the transaction would be terminated.