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105 State Hwy 36, Eatontown, NJ, 07724

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Dealership Info

Phone Numbers:Service Hours:
  • Mon - Sat7:30 AM - 5:00 PM
  • SunClosed
Sales Hours:
  • Mon - Thu9:00 AM - 7:00 PM
  • Fri9:00 AM - 6:00 PM
  • Sat9:00 AM - 5:00 PM
  • SunClosed
Parts Hours:
  • Mon - Sat7:30 AM - 5:00 PM
  • SunClosed

How Does Financing a Car Work?

Car shape keyring and key on calculator

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!

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:

  1. Make certain that buying, rather than leasing, is right for you. If you lack the means to pay cash (and the vast majority of drivers do), you’ll need to finance a car that you intend to buy. (Technically, leasing is also a type of financing. You’re just paying for part of the vehicle, instead of the whole thing.)
  2. Set your budget and find a new or pre-owned vehicle in your price range. Consider how financing and insurance add-ons will impact your monthly payments.
  3. Compare and contrast local lenders (including the dealership itself) near Eatontown and Colts Neck. You want to secure the lowest interest rate that you can find.
  4. Improve your chances of approval by paying off outstanding debts and lowering your debt-to-income ratio.
  5. If you have a good relationship with your bank or your credit union, you can apply for your loan there. Some dealerships offer in-house financing, while others can connect you to many local lenders through one simple financing application.

What Will the Lender Consider?

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:

  • Your credit score
  • Your desired loan term
  • Your current debt-to-income ratio
  • The age of the vehicle
  • The full amount of the loan

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.

Want to Know More About Car Financing in Eatontown?

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.

Contact Us

(877) 672-8680

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105 State Hwy 36 • Eatontown, NJ 07724

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Today's Hours:

Open Today! Sales: 9am-7pm

Open Today! Service: 7:30am-5pm

Open Today! Parts: 7:30am-5pm

Jaguar Monmouth 39.9174056, -74.0794598.