Dealer financing vs your credit union or bank
The Federal Reserve's average rate on a 60-month new-car loan at commercial banks was 7.54% (August 2026). It is an average across many borrowers, a yardstick to read a dealer's rate and your own lender's against, and not an offer.
federalreserve.gov · checked Nov 11, 2026
By Mr. Voltage · Data checked Nov 11, 2026 · Page changed Oct 30, 2026
Where will you register the car?
Harris County, Texas
Example quotes. Pick your place and type yours. Example: three quotes on one car in Harris County, Texas. Pick your own place and type your quotes.
Your deals at a glance
| Deal | Payment | All-in |
|---|---|---|
| $602.91a month | $41,174.41+$1,274.11 more than Deal B | |
| $581.67a month | $39,900.30Lowest | |
| $461.11a month | $43,733.45+$3,833.15 more than Deal B |
Estimate. Your dealer’s buyer’s order and your lender’s disclosures are the numbers that count. Check them against this.
Your numbers stay in this browser.
$602.91 a month · 60 payments
All-in $41,174.41
$581.67 a month · 60 payments
All-in $39,900.30Lowest
$461.11 a month · 84 payments
All-in $43,733.45
Out-the-door $35,159.75
Estimate. Your dealer’s buyer’s order and your lender’s disclosures are the numbers that count. Check them against this.
Out-the-door $35,159.75
Estimate. Your dealer’s buyer’s order and your lender’s disclosures are the numbers that count. Check them against this.
Out-the-door $35,159.75
Estimate. Your dealer’s buyer’s order and your lender’s disclosures are the numbers that count. Check them against this.
New · 2026 · Gas · change
New or used
The sheet starts with a new car; each deal sets its own
Model year
A new car is the current or next model year
Fuel
Gas car. Electric and hybrid cars pay more in some states
Doc fee stated on its own line
Buyer’s orders list the doc fee on its own line, which is what keeps it untaxed in Texas
New · 2026 · Gas · change
New or used
The sheet starts with a new car; each deal sets its own
Model year
A new car is the current or next model year
Fuel
Gas car. Electric and hybrid cars pay more in some states
Doc fee stated on its own line
Buyer’s orders list the doc fee on its own line, which is what keeps it untaxed in Texas
New · 2026 · Gas · change
New or used
The sheet starts with a new car; each deal sets its own
Model year
A new car is the current or next model year
Fuel
Gas car. Electric and hybrid cars pay more in some states
Doc fee stated on its own line
Buyer’s orders list the doc fee on its own line, which is what keeps it untaxed in Texas
$225.00: what Texas presumes reasonable.
Texas calls it a documentary fee.
It must be the same whether you pay cash or finance.
law.cornell.edu · checked Oct 2, 2026
The notice Texas requires with this fee
A DOCUMENTARY FEE IS NOT AN OFFICIAL FEE. A DOCUMENTARY FEE IS NOT REQUIRED BY LAW, BUT MAY BE CHARGED TO BUYERS FOR HANDLING DOCUMENTS RELATING TO THE SALE. A DOCUMENTARY FEE MAY NOT EXCEED A REASONABLE AMOUNT AGREED TO BY THE PARTIES. THIS NOTICE IS REQUIRED BY LAW.
$225.00: what Texas presumes reasonable.
Texas calls it a documentary fee.
It must be the same whether you pay cash or finance.
law.cornell.edu · checked Oct 2, 2026
The notice Texas requires with this fee
A DOCUMENTARY FEE IS NOT AN OFFICIAL FEE. A DOCUMENTARY FEE IS NOT REQUIRED BY LAW, BUT MAY BE CHARGED TO BUYERS FOR HANDLING DOCUMENTS RELATING TO THE SALE. A DOCUMENTARY FEE MAY NOT EXCEED A REASONABLE AMOUNT AGREED TO BY THE PARTIES. THIS NOTICE IS REQUIRED BY LAW.
$225.00: what Texas presumes reasonable.
Texas calls it a documentary fee.
It must be the same whether you pay cash or finance.
law.cornell.edu · checked Oct 2, 2026
The notice Texas requires with this fee
A DOCUMENTARY FEE IS NOT AN OFFICIAL FEE. A DOCUMENTARY FEE IS NOT REQUIRED BY LAW, BUT MAY BE CHARGED TO BUYERS FOR HANDLING DOCUMENTS RELATING TO THE SALE. A DOCUMENTARY FEE MAY NOT EXCEED A REASONABLE AMOUNT AGREED TO BY THE PARTIES. THIS NOTICE IS REQUIRED BY LAW.
Your $5,000.00 down covers the $2,459.75 in tax, title, license and the doc fee first; $2,540.25 goes toward the price.
Your $5,000.00 down covers the $2,459.75 in tax, title, license and the doc fee first; $2,540.25 goes toward the price.
Your $5,000.00 down covers the $2,459.75 in tax, title, license and the doc fee first; $2,540.25 goes toward the price.
Illustrative rate, not a quote. Your APR depends on your credit, the term, the vehicle and the lender.
Illustrative rate, not a quote. Your APR depends on your credit, the term, the vehicle and the lender.
Illustrative rate, not a quote. Your APR depends on your credit, the term, the vehicle and the lender.
60 payments, last $602.72
60 payments, last $581.77
84 payments, last $461.32
- Out-the-door total$35,159.75
- Cash down−$5,000.00
Amount financed$30,159.75
- Out-the-door total$35,159.75
- Cash down−$5,000.00
Amount financed$30,159.75
- Out-the-door total$35,159.75
- Cash down−$5,000.00
Amount financed$30,159.75
cash down plus every payment
+$1,274.11 more all-in than Deal B
cash down plus every payment
cash down plus every payment
+$3,833.15 more all-in than Deal B
Estimate. Your dealer’s buyer’s order and your lender’s disclosures are the numbers that count. Check them against this.
Estimate. Your dealer’s buyer’s order and your lender’s disclosures are the numbers that count. Check them against this.
Estimate. Your dealer’s buyer’s order and your lender’s disclosures are the numbers that count. Check them against this.
3 charges this total leaves out
3 charges this total leaves out
3 charges this total leaves out
The same car at two rates
Take a $32,700.00 car with $5,000.00 down (Texas, with the car registered in Harris County), $30,159.75 financed. At the dealer's 7.40% over 60 months it comes to $602.91 a month, $6,014.66 of interest and $41,174.41 paid in all. At your credit union's 5.90% over the same term it comes to $581.67 a month, $4,740.55 of interest and $39,900.30 paid in all: $1,274.11 less in all.
It can also be the other way round. A dealer arranges the loan through the lenders it works with, and sometimes one of them, or the maker's own finance company, offers a lower rate than your credit union or bank. The only way to tell is to set the two rates side by side, in writing, on the same amount financed and the same term, which is what the three deals above do.
What a longer loan changes
At the dealer's 7.40%, stretching the same loan from 60 months to 84 months lowers the payment by $141.80 a month and adds $2,559.04 to the total. The same loan at the dealer's rate:
Over 60 months: $602.91 a month, $6,014.66 of interest, $41,174.41 in all.
Over 72 months: $520.01 a month, $7,280.58 of interest, $42,440.33 in all.
Over 84 months: $461.11 a month, $8,573.70 of interest, $43,733.45 in all.
How a dealer arranges the loan
The dealer sends your application to one or more lenders. A lender that approves it sets the rate at which it will buy the contract from the dealer. The rate written on your contract can be higher than that, and the lender may share the difference with the dealer; that share is called dealer reserve. A loan you arranged yourself before you sign, from your own credit union or bank, has its rate set by that lender, and you can bring it to the dealer to compare.
Worked examples
Each line below is worked by the same engine as the calculator, on the day this page was built (Nov 11, 2026).
The dealer’s rate
A new car at $32,700.00, $5,000.00 down, financed at 7.40% over 60 months, bought from a dealer in Texas, with the car registered in Harris County. It is deal A in the calculator above.
| Line | Amount |
|---|---|
| Price | $32,700.00 |
| Taxable amount statutes.capitol.texas.gov · checked Oct 2, 2026 | $32,700.00 |
| Motor vehicle sales tax statutes.capitol.texas.gov · checked Oct 2, 2026 | $2,043.75 |
| Doc fee law.cornell.edu · checked Oct 2, 2026 | $225.00 |
| Title application fee statutes.capitol.texas.gov · checked Oct 2, 2026 | $33.00 |
| Registration fee statutes.capitol.texas.gov · checked Oct 2, 2026 | $101.50 |
| TexasSure insurance verification fee txdmv.gov · checked Oct 2, 2026 | $2.00 |
| County road and bridge and child safety fees txdmv.gov · checked Oct 2, 2026 | $23.00 |
| Inspection program replacement fee statutes.capitol.texas.gov · checked Oct 2, 2026 | $16.75 |
| Processing and handling fee law.cornell.edu · checked Oct 2, 2026 | $4.75 |
| Metal license plate fee txdmv.gov · checked Oct 2, 2026 | $10.00 |
| Out-the-door price | $35,159.75 |
| Cash down | $5,000.00 |
| Amount financed | $30,159.75 |
| Monthly payment | $602.91 |
| Interest over the loan | $6,014.66 |
| Total paid, interest included | $41,174.41 |
Your credit union’s rate
A new car at $32,700.00, $5,000.00 down, financed at 5.90% over 60 months, bought from a dealer in Texas, with the car registered in Harris County. It is deal B in the calculator above.
| Line | Amount |
|---|---|
| Price | $32,700.00 |
| Taxable amount statutes.capitol.texas.gov · checked Oct 2, 2026 | $32,700.00 |
| Motor vehicle sales tax statutes.capitol.texas.gov · checked Oct 2, 2026 | $2,043.75 |
| Doc fee law.cornell.edu · checked Oct 2, 2026 | $225.00 |
| Title application fee statutes.capitol.texas.gov · checked Oct 2, 2026 | $33.00 |
| Registration fee statutes.capitol.texas.gov · checked Oct 2, 2026 | $101.50 |
| TexasSure insurance verification fee txdmv.gov · checked Oct 2, 2026 | $2.00 |
| County road and bridge and child safety fees txdmv.gov · checked Oct 2, 2026 | $23.00 |
| Inspection program replacement fee statutes.capitol.texas.gov · checked Oct 2, 2026 | $16.75 |
| Processing and handling fee law.cornell.edu · checked Oct 2, 2026 | $4.75 |
| Metal license plate fee txdmv.gov · checked Oct 2, 2026 | $10.00 |
| Out-the-door price | $35,159.75 |
| Cash down | $5,000.00 |
| Amount financed | $30,159.75 |
| Monthly payment | $581.67 |
| Interest over the loan | $4,740.55 |
| Total paid, interest included | $39,900.30 |
The dealer’s rate, 84 months
A new car at $32,700.00, $5,000.00 down, financed at 7.40% over 84 months, bought from a dealer in Texas, with the car registered in Harris County. It is deal C in the calculator above.
| Line | Amount |
|---|---|
| Price | $32,700.00 |
| Taxable amount statutes.capitol.texas.gov · checked Oct 2, 2026 | $32,700.00 |
| Motor vehicle sales tax statutes.capitol.texas.gov · checked Oct 2, 2026 | $2,043.75 |
| Doc fee law.cornell.edu · checked Oct 2, 2026 | $225.00 |
| Title application fee statutes.capitol.texas.gov · checked Oct 2, 2026 | $33.00 |
| Registration fee statutes.capitol.texas.gov · checked Oct 2, 2026 | $101.50 |
| TexasSure insurance verification fee txdmv.gov · checked Oct 2, 2026 | $2.00 |
| County road and bridge and child safety fees txdmv.gov · checked Oct 2, 2026 | $23.00 |
| Inspection program replacement fee statutes.capitol.texas.gov · checked Oct 2, 2026 | $16.75 |
| Processing and handling fee law.cornell.edu · checked Oct 2, 2026 | $4.75 |
| Metal license plate fee txdmv.gov · checked Oct 2, 2026 | $10.00 |
| Out-the-door price | $35,159.75 |
| Cash down | $5,000.00 |
| Amount financed | $30,159.75 |
| Monthly payment | $461.11 |
| Interest over the loan | $8,573.70 |
| Total paid, interest included | $43,733.45 |
Questions people ask
Should I finance through the dealer or my bank?
This page does not pick one: it shows the difference. Take a $32,700.00 car with $5,000.00 down (Texas, with the car registered in Harris County), $30,159.75 financed. At the dealer's 7.40% over 60 months it comes to $602.91 a month, $6,014.66 of interest and $41,174.41 paid in all. At your credit union's 5.90% over the same term it comes to $581.67 a month, $4,740.55 of interest and $39,900.30 paid in all: $1,274.11 less in all. The figure that decides it is the rate each lender actually offers you, in writing, on the same amount and term. A pre-approval from your own lender gives you one to set beside the dealer's.
Do dealers make more if you finance through them?
They can. When a dealer arranges the loan, the lender may let it write the contract at a rate above the one the lender approved and share the difference, called dealer reserve. The finance office also sells add-ons such as service contracts and GAP, which may be added to the loan. Neither shows up as its own line unless you ask for the buyer's order and the contract and read each line of the amount financed.
Are dealers allowed to mark up interest rates?
In general, yes: lenders commonly let a dealer write the contract at a rate above the one they approved, and share the difference. Whether there is a limit depends on the lender's agreement with the dealer and on state law; this site does not hold a figure for one. What you can do is compare: the payment check works out the rate your quoted payment implies, and the average gives a yardstick. The Federal Reserve's average rate on a 60-month new-car loan at commercial banks was 7.54% (August 2026).
federalreserve.gov · checked Nov 11, 2026
What does a longer loan change?
At the dealer's 7.40%, stretching the same loan from 60 months to 84 months lowers the payment by $141.80 a month and adds $2,559.04 to the total. Over 60 months: $602.91 a month, $6,014.66 of interest, $41,174.41 in all. Over 72 months: $520.01 a month, $7,280.58 of interest, $42,440.33 in all. Over 84 months: $461.11 a month, $8,573.70 of interest, $43,733.45 in all.
What is yo-yo financing?
It is when you take the car home before the financing is final, and the dealer later says the loan fell through and asks you to sign again at different terms. A loan you arranged before signing, from your own lender, is not waiting on the dealer's lender. If it happens to you, you can tell the Consumer Financial Protection Bureau at consumerfinance.gov/complaint.