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 Wyoming, when purchasing a car, you have the option to secure financing through a direct loan from a bank or credit union, or through dealer-arranged financing. If you opt for a direct loan, you can get preapproved for a specific loan amount and interest rate before you shop for a car. This allows you to know the terms of your loan upfront and can give you bargaining power at the dealership. On the other hand, with dealer-arranged financing, the dealership may facilitate a loan for you, often from a bank or financial institution they have a relationship with. It's important to note that dealerships may add a markup to the interest rate provided by the lender as compensation for arranging the financing, which could result in a higher interest rate than what you might get directly from a bank or credit union. However, dealerships sometimes offer promotional financing deals, especially for new cars, which can include lower interest rates that may be more competitive than those offered by your personal financial institution. It's crucial to compare the total costs and terms of any financing option to ensure you are getting the best deal possible.