How do dealerships make money off financing?
Dealerships make money by selling your loan to a bank or financing company and splitting the profit made off of interest. This is why dealership financing might come with higher interests rate outside lenders – after giving the bank its share, dealerships will markup the interest rate slightly to make a profit.
You can sometimes get better deals with dealership financing, but these rates might only be offered to customers with excellent credit or might only be available when bundled with other, less advantageous terms (like having to make extended interest payments over a longer repayment period). Be aware of great promotional interest rates that revert to higher rates after a specific time.