What is a common characteristic of indirect dealer financing?

Indirect dealer financing typically involves loans that are arranged through intermediaries, such as finance companies or banks, rather than through direct contracts with the consumers themselves. In this arrangement, the dealership acts as the intermediary that connects the consumer with the lender. This allows consumers to finance their vehicle purchases at the dealership, while lenders can leverage the dealership's network and customer relationships.

The essence of indirect dealer financing lies in the role of these intermediaries, which not only helps streamline the financing process for consumers but also provides a broader range of lending options. Dealerships can offer competitive financing terms by collaborating with various financial institutions, creating a more efficient purchasing experience for consumers.

This option highlights the structure of the financing process itself—where the dealer does not finance the purchase directly but instead facilitates the connection between the buyer and the lender, which is a hallmark of indirect dealer financing.