What Does it Mean to Finance a Car?

If it’s time to purchase a used or new car for your commute to Hannibal, MO, you can purchase it outright, lease it, or apply for financing. However, you may be wondering what car financing is and how it works. To help you understand the car financing process, the finance team at Shottenkirk Kia of Quincy has created this guide so you can enjoy a stress-free and well-informed car-buying experience. Read more about how car financing works with our team below, then read our car buying tips for more information on the car buying process.

How Car Finance Works

The first step to learning how car finance works with a new or used vehicle is to apply for a car loan through a dealership, a bank, or a credit union. Typically you can begin the credit application online, or you can apply for a loan in person. When you apply, lenders will look at a variety of factors, such as:

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

If you know your credit score is low or you don’t have a strong credit history, consider asking a family member or close friend to cosign your loan.

Pick a Lender

If you are approved for a loan, you may have a few different lenders to choose from. If the dealership you’ve chosen offers in-house financing, you can compare their offer to your bank or a credit union’s offer to see which loan meets your budget. Review your finances and look at how much money you can put down, and how much your monthly payments will be to ensure you will be able to pay back the loan.

Finalize Your Loan Terms

When you’re ready to finalize your loan and buy a car, you may be able to negotiate the price. If this is the case, then you and the salesperson can go over the different offers and prices you’ve found for your chosen vehicle until you settle on a loan with an interest rate that works for you. After you finish negotiations, you can finalize the loan terms and close the deal. You’ll sign all the necessary paperwork, take delivery of the vehicle, and drive to your Keokuk, IA home in your new vehicle!

Learn More About the Car Buying Process with Shottenkirk Kia of Quincy

If you still have questions about how car financing works or what it means to finance a car, visit our Quincy showroom to sit down with our finance team. You can also read our car buying tips for more information on leasing vs. buying and how to buy a new car. Visit us today and soon you’ll be driving through Pittsfield in a new Kia!