Captive Finance Companies that are Right for You

• Posted on Autos.com Editor
• in Auto Loans
• on October 7, 2013

Anyone who’s looking for a new or used vehicle might want to check out deals from captive finance companies. The general role of a captive finance company is to provide auto loans for customers of a specific automaker. Some captive finance companies offer great low rate car loans and competitive auto loan terms to get buyers into a specific make of vehicle. There are a few general principles that help shoppers know which captive finance companies are right for their buying needs.

Betting on the Automaker and the Captive Finance Company

When you talk to some people about buying cars, it sounds a lot like a horse race. Consumers often buy vehicles from specific manufacturers according to the health of the company in question. Many car buyers hold to the idea that as the automaker goes, so goes the captive finance company. Therefore, the first decision that a lot of car buyers make is whether they want to purchase from a specific manufacturer.

Manufacturer Warranties

One other big question that car shoppers factor into their decisions on captive finance companies is what kinds of specific programs these financial dealmakers offer to the public. One of the most common products of a captive finance company is a manufacturer warranty. Buyers of used vehicles can also depend on manufacturer-certified vehicles and used vehicle warranties offered directly from the automaker.

Manufacturer warranties for either new or certified pre-owned cars and trucks are very popular with a buying audience. Savvy shoppers check with a captive finance company to see if the manufacturer warranty program includes transferable warranties for resale, extended parts and labor warranties, and other great features that help limit financial risk after you’ve put your vehicle on the road. These types of programs help buyers hedge against the inevitable declining values of their vehicles.

Easy Deals

The best captive finance companies will hold your hand through the buying process, providing specific services to help you into a car or truck from their affiliated manufacturer. Where a dealership may have ulterior motives like padding the financing agreement, getting specific vehicles off the lot,  or simply maximizing their profit margin, a captive finance company generally has one guiding purpose; to help customers find affordable vehicles and negotiate loan agreements. That’s not to say that a captive finance company doesn’t have to make money, but in general, they may have more of an incentive to offer customer service that buyers can rely on.

Participating Dealerships

Another big issue with a captive finance company is whether it has an agreement with participating dealerships in your area. A lot of the profit of these kind of deals will not be as powerful an incentive if the buyer has to drive hundreds of miles to get service on a warranty or for other events that are based around a physical dealership or auto distributor.

These are some of the big issues to think about when you’re looking to make a deal with a captive finance company to get into your next car or truck.