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How Does Financing a Car Work?

woman signing financing form



Getting ready to purchase your next new or used car for Sarasota commutes? Before getting started, you may be asking yourself, “How does financing a car work?” or “What does it mean to finance a car?” When you shop at a dealership like Cox Chevrolet, you’ll have the option of purchasing your vehicle outright, leasing it, or applying for financing. Learn more about the process with our Bradenton finance experts below!

How Car Finance Works

Before anything else, your first necessary step is to apply for your auto loan through a dealership, bank, or credit union. Many dealerships offer the option of applying online or in person, whichever you find most convenient. Here are some important factors that potential lenders will inspect:

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

If you’re currently in the throes of raising a low credit score and you’re worried about whether this will hold you back, you may want to ask a Tampa friend or family member to be a cosigner on your loan.

Choose Your Lender

Once you’re approved for a loan, you’ll be faced with a few options. If the dealership you’re purchasing from offers their own in-house financing, you’ll want to compare their offer to an offer from a credit union or bank to see which best suits your budget. Consider how much you can make in a down payment, and how much your monthly payments would be to ensure you’re equipped to pay back the loan.

Finalize the Loan Terms

Before signing your paperwork and driving home to Palmetto, you may want to start a price negotiation. In this case, you’ll work with your salesperson until you can settle on a loan with an interest rate you feel good about. At this point, you’ll finalize the loan terms and close the sale. All that’s left to do is sign on the dotted line, get behind the wheel, and get ready to enjoy your new vehicle!

Learn More About How Car Finance Works at Cox Chevrolet

If you have any lingering questions on what is financing a car, or would like to inquire about our current selection of lease specials and finance offers, we invite you to contact us online, give us a call at (941) 251-0310, or stop by to see us in Bradenton anytime! Our dedicated sales team and knowledgeable finance specialists will be happy to help. Planning to trade in your current car when you make your next purchase? Find out how the trade-in process works to prepare yourself beforehand.

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