Dealer Financing

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Dictionary Says

Definition of 'Dealer Financing'

Loans that are originated by a retailer to its customers and are then sold to a bank or other third-party financial institution. The bank purchases these loans at a discount and then collects principle and interest payments from the borrower. Also called an indirect loan.
Investopedia Says

Investopedia explains 'Dealer Financing'

A well-known example of dealer financing is auto dealers that offer car purchase financing. Many car dealers markup the finance company's interest rate and keep the difference as additional profit.

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Related Definitions

  1. Financing

    The act of ...
  2. Loan

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  3. Commercial Bank

    A financial ...
  4. Unsecured Loan

    A loan that is ...
  5. Combination Loan

    1. A transaction ...
  6. Loan Commitment

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  7. In-House Financing

    A type of seller ...
  8. Vendor Financing

    The lending of ...
  9. Time-Sale Financing

    A form of ...
  10. Dealer Incentive

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