Financing New Cars through a dealership will cost one out of four buyers an additional $1,000. About half of car buyers choose financing through a dealer.

The Consumer Federation of America, a Washington, D.C. based consumer interest group, said that dealer financing of new cars totals $1 billion nationwide in additional fees and padded interest rates.

What happens, the group said, is that a bank approves an interest rate, the dealer tacks on additional percentage points as a kind of service fee and then the dealer and lender split the difference.

Always start at your bank or credit union, then check out the internet to find the lowest interest rate that you qualify for.

Then when the dealer offers you a higher rate, you can happily say you have financing elsewhere.

Many shoppers have chosen Lease Cars as an alternative to buying. The two most important advantages of leasing a car are the lower monthly payments, and ease of changing vehicles without the need to sell or trade.

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