Dealer financing is the term used to describe the situation when a seller of a thing is willing to make loans to consumers so that they can buy the things.

In the days of yesteryear, particularly in rural communities, many stores provided financing. This situation still exists to some extent, but seems to be markedly decreased. Many small clothing stores, especially, have a tradition of participating in this sales strategy. But even here, the practice -- at least in the US, seems to be largely fading away.

The common source of dealer financing today is from car dealerships. And is often a misnomer. Independent used-car car dealers often loan their own money and in fact, make the bulk of their income in interest payments. But when obtaining a loan from the dealer for a new car, it is almost universally not the dealer making the loan -- though very often the car manufacturer. The dealer is acting as a loan broker.

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