What does it mean to finance a car? You’re essentially just taking out a loan for the value of the vehicle and paying it back over an agreed-upon term. This seems straightforward, but it’s easy to get burned if you don’t know the ins and outs of the process. Now that you’ve answered, “What is financing a car?” it’s time to find out how car finance works!
Maybe you already know the basics of lending, but how does financing a car work exactly? Preparing for the application is often the scariest part of the auto financing process, but it doesn’t have to be this way. Here’s the whole process laid out step by step:
So, you’re ready to submit your application. Whether you choose to buy new or used, the lender will consider each of the following factors:
Knowing how car finance works can put you in a better position to buy, but if it still isn’t enough, consider adding a reputable cosigner.
If you’re not sure how to finalize the loan, just keep in mind that options including your loan term and your down payment are usually adjustable. Your interest rate is determined primarily by your credit situation, but there may be some range in the offers you receive. Trading in a car is a great way to lower your monthly payment in a pinch.
If you see a model you’d like to try out on the roads near Rumson and Red Bank, just let us know! Our financing team would be more than happy to walk you through the entire financing process in person. We’ve even made it easy to shop from home.