What Are Direct and Indirect Finance?

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Buying a new car for your Cincinnati commute can be exciting. It can also be confusing due to all of the different options available. When you go to finance a vehicle, you can either choose direct or indirect financing. What is direct and indirect finance? Compare direct vs. indirect finance with the finance center at Beechmont Toyota to make your car-buying experience a whole lot simpler. 

Direct vs. Indirect Finance: What’s the Difference?

What do the terms direct and indirect finance mean, and how can knowing the difference help you on your Loveland car-buying experience? Here are the meanings of each term: 

  • Direct Finance: Direct finance occurs when you apply for a loan through the same lender, which is usually a bank or other financial company. With direct finance, you’ll receive your personal loan or interest rate, and then you’ll know how much you’ll have to spend at the dealership. 
  • Indirect Finance: Indirect finance occurs when you receive loan packages through a third party lender. After applying for a loan, you’ll see what options are available. This is all done usually after you’ve shopped around.

Pros & Cons

There are advantages and disadvantages to both methods of finance, and the best method will depend on your circumstances and which method works best for you. Here are the major pros and cons of direct vs. indirect finance: 

Direct Finance

  • Pros: One of the biggest advantages of direct finance are the flexibility and ability to customize. You can apply for as many loans as you want before or after you shop. Plus, you have total control of the process when you work directly with a lender. 
  • Cons: One downside of direct finance is that the process usually takes more time. You also have to be sure to do some research so you can determine your best options. 

Indirect Finance

  • Pros: An advantage of indirect finance is that you can speed up the process by having a team. Having your dealer and lender run your credit several times during the day can help you search out multiple loan opportunities all at once. 
  • Cons: One disadvantage is that the higher speed of indirect finance could cost more, so it’s something you’ll want to consider. 

Compare your direct vs. indirect finance options when you visit Beechmont Toyota near Mason or online, and see which option works best for you. 

Get the Finance You Need at Beechmont Toyota

Now what you know what direct and indirect finance is, you can visit Beechmont Toyota to see which of these options work best for you. Contact us to speak to one of our team members and apply for financing online.

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