Matthews Auto Group is a multi-location car dealership, not a lender or financing company
Matthews Auto Group operates as a traditional car dealership with multiple locations, primarily in the Southeast. They sell new and used vehicles and offer in-house financing through their dealership, meaning they arrange loans directly with customers rather than referring you to a bank. Understanding how dealership financing works — and how it differs from getting a loan from your own bank before you shop — helps you make a more informed decision about how to pay for a car.
Dealership financing is convenient because the process happens in one place: you find the car, negotiate the price, and arrange the loan all at the same location. However, the interest rate and terms you receive depend on the dealership's relationships with lenders and your own credit profile. Shopping for a loan separately before visiting a dealership gives you a baseline to compare against, which is why many financial advisors recommend getting pre-approved elsewhere first.
Key Takeaways
- Matthews Auto Group is a car dealership that sells vehicles and offers financing through their dealership, not a bank or credit union.
- Dealership financing is arranged on-site, but the interest rate and loan terms depend on your credit history and the lender the dealership partners with.
- Getting pre-approved for a car loan from your own bank or credit union before visiting a dealership gives you a rate to compare and strengthens your negotiating position.
- Dealership financing may include add-ons like extended warranties or gap insurance that increase the total cost of the loan.
How dealership financing works
When you finance a car through a dealership like Matthews Auto Group, the dealership does not lend you the money directly. Instead, they arrange a loan with a lender — often a captive finance company (owned by the car manufacturer), a bank, or a credit union. The dealership handles the paperwork, and the lender funds the loan. You then make monthly payments to the lender, not to the dealership.
The interest rate you receive depends on several factors: your credit score, your down payment, the length of the loan, and the specific lender the dealership partners with. A higher credit score typically means a lower interest rate. A larger down payment reduces the amount you need to borrow, which can also lower your rate. The dealership may also mark up the rate slightly — meaning they add a percentage point or two to the lender's base rate — as a way to earn money on the transaction.
This is why comparing rates matters. If you already know what rate you can get from your own bank or credit union, you can tell the dealership: "I have a pre-approval for 6.5 percent. Can you beat that?" This puts pressure on the dealership to offer you a competitive rate rather than their first offer.
Differences between dealership financing and bank pre-approval
Getting a car loan from your bank or credit union before you shop is called a pre-approval. You provide your financial information, the lender checks your credit, and they tell you the maximum amount they will lend and at what rate. You then go to the dealership with that loan offer in hand.
The advantage of pre-approval is that you know your rate before you negotiate. You also know exactly how much you can spend, which prevents you from falling in love with a car you cannot actually afford. Pre-approval also signals to the dealership that you are a serious buyer with financing already lined up, which can strengthen your negotiating position on the car's price.
Dealership financing skips the pre-approval step. You find the car, agree on a price, and then the dealership arranges financing. This is faster and simpler if you do not mind accepting whatever rate they offer. However, you have less information going in, and you may end up paying a higher rate than you would have received elsewhere.
What to watch for in dealership financing paperwork
When you finance through a dealership, the loan agreement includes the principal (the amount you are borrowing), the interest rate, the loan term (usually 36 to 72 months), and your monthly payment. Read this section carefully to make sure the numbers match what you discussed.
Dealerships often add optional products to the loan, such as extended warranties, gap insurance (which covers the difference between what you owe and what the car is worth if it is totaled), paint protection, or service plans. These add-ons increase the total amount you finance and therefore increase the total interest you pay. You are not required to buy these products, and you can decline them. If the dealership says an add-on is "included," ask whether it is already in the price or whether it will be added to your loan amount.
Before you sign, verify that the interest rate shown in the paperwork matches what you agreed to verbally. Dealership financing is sometimes contingent on your credit check coming back at a certain score — if your actual credit is lower, the dealership may try to raise your rate after you have already agreed. This is called a spot delivery, and it is legal in many states but not all. Knowing your own credit score beforehand helps you spot this.
Steps to compare financing options
Start by checking your credit score through a free service like AnnualCreditReport.com or through your bank's website. Knowing your score helps you predict what rate you might receive. Next, contact your bank or credit union and ask about their car loan rates for someone with your credit profile. Many lenders will give you a rate estimate without a hard credit pull, which does not affect your score.
Once you have a pre-approval offer in writing, you can shop for cars. When you find one you want at Matthews Auto Group or another dealership, let them know you have outside financing and ask them to match or beat that rate. If they can, compare the total cost: the interest rate, the loan term, and any add-ons. A lower rate over a longer term might cost you more in total interest than a slightly higher rate over a shorter term.
If the dealership's offer is better than your pre-approval, you can accept it. If not, you can use your pre-approval to buy the car. Either way, you have made an informed choice rather than accepting the first offer.
Understanding your monthly payment
Your monthly car payment is calculated based on three things: the loan amount (principal), the interest rate, and the loan term. A longer loan term means a lower monthly payment but more interest paid overall. For example, a $25,000 loan at 6 percent interest costs about $467 per month over 60 months, but about $555 per month over 48 months. Over the full loan, you pay more interest on the 60-month loan even though the monthly payment is lower.
When you receive a loan offer from a dealership, the paperwork should show your monthly payment, the total amount of interest you will pay, and the total amount you will pay by the end of the loan. Review these numbers to understand the true cost of borrowing. If the monthly payment stretches your budget too thin, it is better to find a less expensive car or make a larger down payment than to take on a loan you cannot comfortably afford.
What happens if you want to pay off the loan early
Most car loans allow you to pay off the balance early without penalty. This means if you receive a bonus or inheritance, you can put that money toward the loan and reduce the total interest you pay. Before you sign the loan agreement, ask whether there is a prepayment penalty — it is rare, but some lenders charge a fee if you pay off early.
Paying off early is a smart move if you have the cash available, because every month you shorten the loan saves you interest. However, do not drain your emergency savings to pay off a car loan early. Keep three to six months of living expenses in a savings account first, then use extra money to pay down the car loan.
Frequently Asked Questions
Should I finance through the dealership or get a loan from my bank first?
Getting pre-approved from your bank or credit union first gives you a rate to compare and puts you in a stronger negotiating position. You can then let the dealership match or beat that rate. If you do not want to shop around, dealership financing is simpler, but you may pay more in interest.
What is gap insurance and do I need it?
Gap insurance covers the difference between what you owe on the loan and what the car is worth if it is totaled in an accident. It is most useful if you are making a small down payment (less than 20 percent) or financing a car that depreciates quickly. It is optional and adds to your loan cost, so weigh whether the protection is worth the extra monthly payment.
Can I negotiate the interest rate at the dealership?
Yes. If you have a pre-approval from another lender, tell the dealership your rate and ask them to match it. Even without a pre-approval, you can ask whether the dealership can lower the rate or shorten the loan term. The worst they can say is no.
What if my credit score is low?
A lower credit score typically means a higher interest rate. Before you visit the dealership, check your credit report for errors at AnnualCreditReport.com and dispute any mistakes. Getting pre-approved from a credit union (which often has more flexible lending standards than banks) can also help you understand what rate you might receive.
Can I return the car if I change my mind after financing?
Most dealerships do not have a return period for financed cars. Once you sign the loan agreement, you own the car and owe the loan. Some dealerships offer a short window (usually three days) to return the car, but this varies by location and state law. Ask about the dealership's return policy before you sign.