If you buy a (new or 'certified' used) car at an American dealership licensed by a manufacturer (and, of course, your credit is good), you can borrow money from the manufacturer's associated bank, such as Ally (for General Motors vehicles) or Toyota Financial (for Toyota vehicles). This is streamlined: the seller has a lender's agent working in the same building, and they work in tandem, issuing a loan, preparing out a mortgage (lien) for the buyer to sign, and selling the car. (I think the seller may actually be the lender's agent, actually.)
But other banks are also willing to lend car buyers money. How would that work, then?
- Does the outside bank send a signatory to the dealership to issue a check to the dealer and collect the signed mortgage? (I find it hard to fathom that banks would send people out for this.)
- Does the buyer go to the bank ahead of time and collect a check made out to the seller? (But then the bank has no lien agreement in hand.)
- Does the buyer buy the car for a simple IOU and the bank's telephoned promise to pay, and then go to the bank to issue the mortgage? (But then the dealer has little guarantee of payment when it sells the car.)
What are the practical logistics?