How Does Financing a Car Work?

happy woman in a car

Without the right information, car shopping can be a stressful and confusing process, with financing being only one of the options available. If you’re wondering what buying a new or certified pre-owned vehicle entails, or whether financing is right for you, the finance team at Brown Dodge Chrysler Jeep Ram is here to help. Read on to learn more about how car financing works.

What is Financing a Car?

For starters, financing involves applying for an auto loan. Devine area drivers may choose to apply for their loan through the dealership, a bank, or through a credit union, though it is not uncommon to apply through multiple sources in order to find the best deal. Here are some of the factors that lenders will consider when determining loan eligibility and interest rate:

  • Age of the vehicle
  • Credit score
  • Debt-to-income ratio
  • Loan amount
  • Repayment term/length of the loan

Drivers who have a short credit history, or bad credit, may receive lender offers for loans with higher interest rates. If possible, try to improve your credit score ahead of time. You may also ask a friend or relative with good credit if they can cosign for you.

Auto Financing Preparation

Before applying for an auto loan, Castroville drivers should take a few important steps:

  • Payment Calculator: Use our online payment calculator to calculate your potential monthly loan payment against how much you can afford to pay each month.
  • Down Payment: Calculate your down payment. Making a bigger down payment will lower the total cost of your purchase, your monthly payments, and the impact of a higher interest rate. Be sure to factor in the trade-in value of your current vehicle.
  • Budget Car Costs: Remember to include the cost of gas, insurance, and maintenance when making your calculations. If your monthly payment is on the higher end of your budget, unexpected costs can result in a major setback.
  • Application Submissions: If you decide to apply for financing through multiple sources, be sure to submit all of your applications in a short period of time. Spreading out your applications can negatively impact your credit score.

Completing the Process

After considering all of your options, you may decide to apply for financing online before visiting our dealership. While doing so can certainly simplify the process, waiting to apply may provide you with an opportunity to negotiate on a price before you finalize loan terms and take ownership of your new vehicle. You’ll also have the opportunity to select additional packages and add-ons, including protections like GAP insurance.

Finance Your Next Car with Brown Dodge Chrysler Jeep Ram in Devine

Ready to take the next steps? Let our finance team help you get into the car of your dreams, at a price you can afford. Still have questions about what it means to finance a car? Contact us for additional details. We look forward to serving you. Once you have the right financing, check out our newer cars and even compare models, like the Jeep Wrangler vs. Jeep Wrangler Rubicon, to see which vehicle is perfect for you. If you want to know about gap insurance, leasing vs. buying, or anything finance-related, we have your back.

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(830) 715-0347

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170 IH 35 North • Devine, TX 78016

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Today's Hours:

Open Today! Sales: 9am-6pm

Open Today! Service: 7:30am-2:30pm

Brown Dodge Chrysler Jeep Ram 29.1313311, -98.8925539.