How Does Car Financing Work?

Once you’ve decided to get that used car in Highland Park, you can lease it, buy it outright, or apply for financing. So, what is car financing anyway? If you’ve been asking yourself, “What does it mean to finance car?” or “How does car financing work?”, we’re here to help you better understand and help make the car buying process more informative and less stressful.

How Does Financing a Car Work?

The first step in learning how car finance works with used or bargain vehicles is to apply for a loan through your dealership, a credit union, or a bank. The applications can be started online, or you can come visit us in Highland Park to apply at our dealership. Lenders will look at factors like:

• Loan Amount
• Length of Loan
• Credit Score
• Age of the Vehicle
• Debt-to-Income Ratio

Consider asking a family member or close friend of yours to cosign your loan if your credit score is low, or is you don’t have a strong credit history.

Select Your Lender

Once approved for a loan, you’ll have various options to choose from. Should the dealership offer in-house financing, you should compare their offer to a bank or credit union offer to see which fits your needs and budget best. Figure out how much money you can safely put down and how much your monthly payments will be so you know you can pay back the loan without worry.

Finalize the Loan Terms

Before you can finalize your loan and buy your car, you may have to negotiate a price. Should this happen, you and your salesperson will go back and forth, working until you find a loan with an interest rate that works best for you and them. Once that is all settled, you can begin finalizing the loan terms and close that deal! Sign all the paperwork that is needed, take delivery of your vehicle, and drive home to Gurnee in your new car.

Learn More About Automotive Financing at Muller Honda Pre-Owned

For any and all automotive financing questions or concerns, whether it be liability insurance coverage or loan rates, you can trust Muller Honda Pre-Owned to help you out. Visit us today near Chicago or contact us online!