If you are buying a car and want to borrow the money to pay for it, you have the options of (1) going directly to your bank or credit union and getting preapproved for a loan in a certain amount and with a certain interest rate, or (2) going to the car dealership and inquiring about dealer-arranged financing. One difference in these options is that with dealer-arranged financing the dealer may negotiate a higher interest rate with you than the bank offers, and take the additional money you pay in interest as compensation for the dealership. But if you are purchasing a new car, the car dealer may offer you lower interest rates than your bank or credit union.

In Georgia, when financing a car purchase, you have two primary options: obtaining a loan from a bank or credit union, or opting for dealer-arranged financing. If you choose to get preapproved for a loan from a bank or credit union, you will know the loan amount and interest rate in advance. This can provide leverage when negotiating the price of the car and may offer more competitive interest rates. On the other hand, dealer-arranged financing can be convenient as it allows you to arrange the car purchase and financing in one place. However, dealerships may negotiate higher interest rates than what you might get from a bank or credit union, and they may receive a portion of the interest as compensation. It's important to note that dealerships sometimes offer promotional financing rates, especially for new cars, which can be lower than those offered by banks or credit unions. It's advisable to compare the total costs and terms of any financing offers and consider consulting with an attorney if you have specific legal questions or concerns regarding auto financing.