BROWSE

Dealer Financing

What is '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.

Explaining '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.


Further Reading


What financing data reveal about dealer leverage
papers.ssrn.com [PDF]
Abstract The Federal Reserve collects data on the financing activities of the primary government securities dealers. Some market analysts argue that the data show a considerable rise in dealer leverage in recent years. However, a close reading of the data …

The federal reserve's primary dealer credit facilityThe federal reserve's primary dealer credit facility
papers.ssrn.com [PDF]
Abstract The Federal Reserve collects data on the financing activities of the primary government securities dealers. Some market analysts argue that the data show a considerable rise in dealer leverage in recent years. However, a close reading of the data …

Matching collateral supply and financing demands in dealer banksMatching collateral supply and financing demands in dealer banks
papers.ssrn.com [PDF]
Abstract The Federal Reserve collects data on the financing activities of the primary government securities dealers. Some market analysts argue that the data show a considerable rise in dealer leverage in recent years. However, a close reading of the data …

Prone to fail: The pre-crisis financial systemProne to fail: The pre-crisis financial system
www.aeaweb.org [PDF]
Abstract The Federal Reserve collects data on the financing activities of the primary government securities dealers. Some market analysts argue that the data show a considerable rise in dealer leverage in recent years. However, a close reading of the data …

Collateral values by asset class: Evidence from primary securities dealersCollateral values by asset class: Evidence from primary securities dealers
academic.oup.com [PDF]
Abstract The Federal Reserve collects data on the financing activities of the primary government securities dealers. Some market analysts argue that the data show a considerable rise in dealer leverage in recent years. However, a close reading of the data …

Market liquidity after the financial crisisMarket liquidity after the financial crisis
www.annualreviews.org [PDF]
Abstract The Federal Reserve collects data on the financing activities of the primary government securities dealers. Some market analysts argue that the data show a considerable rise in dealer leverage in recent years. However, a close reading of the data …

Financial management practices and farm profitabilityFinancial management practices and farm profitability
www.emerald.com [PDF]
Abstract The Federal Reserve collects data on the financing activities of the primary government securities dealers. Some market analysts argue that the data show a considerable rise in dealer leverage in recent years. However, a close reading of the data …

How do Treasury dealers manage their positions?How do Treasury dealers manage their positions?
papers.ssrn.com [PDF]
Abstract The Federal Reserve collects data on the financing activities of the primary government securities dealers. Some market analysts argue that the data show a considerable rise in dealer leverage in recent years. However, a close reading of the data …

Credit supply disruptions: From credit crunches to financial crisisCredit supply disruptions: From credit crunches to financial crisis
www.annualreviews.org [PDF]
Abstract The Federal Reserve collects data on the financing activities of the primary government securities dealers. Some market analysts argue that the data show a considerable rise in dealer leverage in recent years. However, a close reading of the data …



Q&A About Dealer Financing


Who collects principle and interest payments from the borrower?

The bank collects principle and interest payments from the borrower.

How does the bank purchase these loans?

The bank purchases these loans at a discount.

What are some examples of dealer financing?

Some examples of dealer financing include auto dealers who offer car purchase financing, used car dealers, boat dealers, etc.

What is dealer financing?

Dealer financing is a loan that is originated by a retailer to its customers and then sold to a bank or other third-party financial institution.