Congratulations! You’re getting ready to purchase your next car. But before you can get behind the wheel, you’ll need to create your custom financing plan. We’re here to help you learn the ins and outs of car financing. So, if you’ve ever asked yourself, “How does car financing work?”, keep reading to learn more!
Car financing is a way for you to get behind the wheel of your dream car without having to pay the full amount of the vehicle outright. This gives you the ability to make smaller payments over a period of time.
The length of your automotive loan is set at the time of purchase. Typically, like with most loans, you’ll have to pay interest on this automotive loan. Your credit score can factor into what percentage the interest rate will be.
PRO TIP: Experts say a good credit score when buying a car is anything above 660.
If your credit score isn’t at or above 660, you can consider having someone co-sign the automotive loan. A co-signer is someone who will take on the responsibility of a loan if it isn’t paid on time. Knowing two people are responsible for your car loan may help lower this interest rate.
There’s more to car financing than simply paying the total value of the car. Each financing plan is unique to the driver’s needs so you and the loan provider both benefit from the loan.
Things like credit score and interest rate impact the total amount you’ll pay over time, but there are some additional factors that may help lower your overall payments:
Of course, if you have any questions about the financing process or if you’re unsure what’s best for your requirements, our team is here to help!
There are some terms you’re likely to hear when financing a car. Let’s take a look at some of these terms:
By knowing these basic car financing terms, you’ll be more prepared to secure your automotive loan.
This quick guide to car financing was designed to help you learn more about how car financing works. Of course, there’s still more to learn.
Talk with one of our expert financers to learn more about car financing, your unique requirements, and more today!