In-house financing refers to when you purchase a vehicle and the dealer lends you the money for it. Essentially, the dealer becomes the lender. Although this may be handy in some instances as the dealer will have a vested interest in advancing you the loan, there are a few things that you need to be cautious of.
The dealer is not bound to any type of credit adjudication parameters and hence can decide to give you whatever interest rate they choose. This may result in paying more interest than required based on your individual profile. More importantly, dealers do not report to the credit bureau. As you fulfill your repayment obligations, you do not improve your credit on bureau and retain your current credit profile.
You may be able to receive a lower rate from that dealer on your next vehicle purchase but the end result is being obligated to purchase at one place.
