We believe everyone should be able to make financial decisions with confidence. And while our site doesn’t feature every company or financial product available on the market, we’re proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward — and free.
So how do we make money? Our partners compensate us. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services. Here is a list of our partners.
Can a Dealership Refuse Outside Financing?
Car dealers can refuse your outside financing, but that doesn't necessarily mean you're out of options.
Many, or all, of the products featured on this page are from our advertising partners who compensate us when you take certain actions on our website or click to take an action on their website. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.
Benjamin Din is a lead writer at NerdWallet. He previously was a technology reporter at Politico, where he authored a daily newsletter covering tech and telecom policy.
Benjamin loves to travel — both for work and for fun. He’s reported from three continents and visited nearly two dozen countries. He has written for The Wall Street Journal, Bloomberg News, The Washington Post, The San Francisco Chronicle and The (Johannesburg) Star, as well as covered two Olympics with NBC Sports.
His goal is to visit a new country and a new state each year.
Julie Myhre-Nunes Assigning Editor | Auto loans, consumer credit
Julie Myhre-Nunes helps lead auto loans and cars coverage at NerdWallet. She has been in the personal finance space for more than 10 years. Before joining NerdWallet, Julie oversaw editorial teams at NextAdvisor and Red Ventures. Her personal finance insight has been featured on Forbes, The Boston Globe and CNBC. Julie’s writing has been published by USA Today, Business Insider and Wired Insights, among others. Email: [email protected].
Car dealerships have the right to refuse your outside financing, and they don’t need a special reason to do so.
Although legal, the practice can be frustrating for buyers who don’t want to be forced into dealer-arranged financing, especially if they’ve already been preapproved for an auto loan with better rates.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
Some dealerships will decline outside financing outright — a practice fueled by the shortage-driven car market, with dealers trying to squeeze higher profit margins out of their dwindling inventories.
Other times, they’ll turn down outside financing if you’ve negotiated down the price. To make back that lost money, they’ll insist that you use dealer-arranged financing.
What to do when a dealer refuses outside financing
Using dealer-arranged financing isn't necessarily a bad thing, and many people finance their vehicles through the dealership.
However, the only way to know for sure that you’re getting a good deal is to compare rates for auto loans and get preapproved for one before you head to the dealership. If the dealer can beat your preapproval offer, then you’re in a great position to continue negotiating.
Ultimately, if the dealer’s terms don’t make sense for you and they refuse to budge, walk away. Buying a car is a major purchase, and you don’t want to get locked into a bad deal.
You can also shop around at other dealerships to see what they’re offering. You may find one that has the same vehicle on the lot without the financing restrictions.
NerdWallet's ratings are determined by our editorial team. The scoring formula for student loan products takes into account more than 50 data points across multiple categories, including repayment options, customer service, lender transparency, loan eligibility and underwriting criteria.
NerdWallet's ratings are determined by our editorial team. The scoring formula for student loan products takes into account more than 50 data points across multiple categories, including repayment options, customer service, lender transparency, loan eligibility and underwriting criteria.
Consider refinancing to avoid dealer-arranged financing
Given the car shortage, it may be hard to find the car of your dreams on the lot. So what happens if you’ve found it at a dealership that refuses outside financing but offers terrible terms?
Some buyers have reported using a loophole: accepting the dealer-arranged financing, then refinancing their auto loan elsewhere at a lower rate.
Dealers lose out on their commission for financing if the loan is paid off within 90 days. Whether you choose to refinance in that period depends on how you feel about the sales experience and how quickly you can arrange a refinancing loan.
Before you go this route, confirm with your prospective lender that the same rate you were preapproved for would still apply to a refinance. You’ll also want to read your dealer-arranged loan agreement carefully and understand any penalties, such as an early termination fee.