<P> Sometimes the dealer has the option of marking up the interest rate of the contract and retaining a portion of that markup . For example, a bank may give a wholesale money rate of 6.75% and the dealer may give the consumer an interest rate of 7.75% . The bank would then pay the dealer the difference or a portion thereof . This is a regular practice because the dealership is selling the contract to a bank just like it sold a car to the customer . Most banks or states strictly limit the amount a contract rate may be marked up (by giving a range of rates at which they will buy the contract). In many cases this amounts to little difference in the customer's payment as the amount borrowed is small by comparison to a mortgage and the term shorter . </P> <P> Customers may also find that a dealer can get them better rates than they can with their local bank or credit union . However, manufacturers often offer a low interest rate OR a cash rebate, if the vehicle is not financed through the dealer . Depending upon the amount of the rebate, it is prudent for the consumer to check if applying a larger rebate results in a lower payment due to the fact that s / he is financing less of the purchase . For example, if a dealer has an interest rate offer of 7.9% financing OR a $2000.00 rebate and a consumer's lending source offers 8.25%, a consumer should compare at the credit union what payments and total interest paid would be, if the consumer financed $2000.00 less at the credit union . The dealer can have their lending institution check a consumer's credit . A consumer can also allow his or her lending source to do the same and compare the results . Most financing available at new car dealerships is offered by the financing arm of the vehicle manufacturer or a local bank . </P> <P> Dealers may also offer other services, typically through the Finance and Insurance office . These additional services can include: </P> <Ul> <Li> Service contracts: While any vehicle sold in the United States now comes standard with some degree of manufacturer's warranty coverage, customers have a wide range of choices to cover their vehicle from mechanical failure beyond that point . Service contracts may have the same terms of coverage as the vehicle's original manufacturer's warranty, but often they do not . Often service contracts carry a deductible as might any insurance contract . Because of the vast number of choices, it is important for consumers to be aware of the coverages before entering into an agreement . Usually these service contracts do not cover regular maintenance items such as brakes, fluids, or filters . In some states, particularly Florida, the cost of such agreements is heavily regulated . </Li> </Ul>

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