How Does Car Financing Work?

Is it time to purchase a used or new car to enhance your drives around Provo and Lehi? You have the option of buying the vehicle outright, leasing it, or applying for financing. But what is financing a car anyway? If you’re wondering, “What does it mean to finance a car?” and “How does financing a car work?”, the team at Brent Brown Toyota, is here to help you understand so you can have a well-informed and stress-free car-buying experience.

How Does Financing a Car Work?

The first step to learn how car finance works with a new or used vehicle is to apply for the auto loan through Brent Brown Toyota, a bank, or a credit union. Apply for the auto loan online, or fill it out at our Orem dealership. Factors that the lender will look at include:

• 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 the strongest credit history, considering asking a close friend or family member to cosign your loan.

Choose Your Lender

If you get approved for an automotive loan, you may have a few options to choose from. If the dealership offers in-house financing, you are able to compare their offer to a bank or credit union so you can see which is the best deal. Take a look at how much money you are able to put down, and how much your monthly payments will be to ensure you can pay back the loan on time.

Finalize the Loan Terms

Before the loan is finalized, you will want to negotiate the price. The negotiation process is when a Draper car buyer and the salesman goes back and forth until you have settled on a loan with an interest that works for your budget. Once you have done that, the loan will get finalized, and the deal is closed. You will then sign all of the necessary paperwork, take the delivery of the vehicle, and drive home to the Draper area in your Toyota vehicle.