The idea of financing a vehicle may seem overwhelming, especially when it’s just one factor to consider when you’re getting ready to purchase a vehicle. You also need to determine your budget, figure out what type of vehicle you’d like, if you would prefer new or used, and what features you need. If you are planning to finance a vehicle, it’s helpful to know how the process works.
If you’re a first-time car buyer, you might not be familiar with how to finance a vehicle.
Financing a car means taking out a loan from a lending institution, such as a bank or credit union, to pay for your new or used vehicle rather than paying the full amount upfront. You’re borrowing money from the financial institution to cover the price of the vehicle. You may or may not want or need to make a down payment. You can choose to make a down payment to help offset the total cost of the car and lower the monthly payment amount. If you currently own a vehicle, you could also trade it in and put any equity that you have in that vehicle toward your purchase.
When considering your budget for vehicle financing, you should consider the loan amount, the interest rate, and the loan term. The loan amount is how much you need to borrow to pay for the vehicle. The interest rate is the amount of interest charged to the buyer. It is typically expressed as an annual percentage rate (APR). The loan term determines how long you have to repay the financial institution. Any loans arranged by Whitten Brothers Automotive will be simple interest loans, which means that you can pay them off early without fees or penalties if you wish to do so.
Once the terms are set, you’ll make monthly payments to the financial institution over a certain period of time until the loan is paid off. At that point, you will own the vehicle outright.
Before starting the car-buying process, you may want to check your credit score to find out what sort of borrowing power you have. Financial institutions want to ensure they’ll be paid back, and a higher credit score is an indication that you’ll be able to fully pay off the vehicle financing. If you have a lower credit score, it’s still possible to get a loan. You should also review your report for any errors that need to be disputed, especially if they’re affecting your score.
Another step to take before you start shopping is to determine your budget. Figure out how much money you can afford for a down payment as well as how much you can afford to pay each month. This will help keep you more focused as you start looking at different new or used vehicles. You can use our vehicle financing calculator to see if you can afford payments for a certain vehicle.
Once you’ve chosen which vehicle you’d like to purchase, you’ll apply for the loan to find out what the monthly payments will be. You can do this on your own or Whitten Brothers Automotive can help streamline this process and present you with options. The payments will include the loan principal and the interest.
One alternative to financing a vehicle is leasing a vehicle. Leasing is similar to “renting” the vehicle from a financial institution. As with a loan, you’ll make monthly payments, but at the end of the lease term, you return the vehicle. Leasing is a great option for those who are conscious about their payments. You could also buy out the lease for a predetermined amount if you want to own the vehicle when the lease terms are up.
The other alternative is to pay for the vehicle upfront in one lump sum. This will likely require you to pay in cash.
Vehicle financing is available for both new and used cars, trucks, SUVs, and vans. This expands the inventory available to you within your budget.
Because you’ll be making monthly payments, you’ll prove to reporting agencies that you’re a reliable borrower, which can help improve your credit score.
With a car loan, you get the funding immediately. Saving up to buy a vehicle outright can take a long time. With financing, you’re able to split that cost over time, allowing you to buy a car sooner.
As we noted, once the loan is paid off, you retain complete ownership of the vehicle. You can keep driving it for as long as you’d like without having to make monthly payments. You could also sell it or trade it in and put that money toward another vehicle.
Leasing a vehicle comes with certain restrictions, such as mileage caps. Financing a vehicle allows you to drive as many miles as you’d like without having to pay additional fees. You can also upgrade or customize your vehicle because you don’t have to return it when the lease term is up.
When you finance through our dealership, you get the convenience of having the car-buying process all in one location. You can shop, test drive, and let Whitten Brothers arrange a loan for you. With over 100 years of experience helping people purchase vehicles, Whitten Brothers Automotive knows how to help you structure the best loan possible.
It can be time consuming to arrange finance on your own and wait to be approved. We have long-standing relationships with several financial institutions that allow us to provide you with the best possible vehicle financing option. You can get pre-qualified by applying for financing through Whitten Brothers Automotive online.
We’ll help you find loan terms that fit your budget. And with us, you’ll always get transparent pricing, so there’s no concern about hidden fees. Our team is here to help you through the entire process from finding the right vehicle to finding the right financing and completing all of the necessary paperwork.
If you’ve already been pre-approved to finance a vehicle, we can work with that. We’ll arrange your financing so you don’t have to go back and forth between our dealership and the lender.