How Does Car Financing Work?

Young couple at dealership

If you’ve been shopping around the Detroit and Taylor area and pondering your automotive purchase options then you may be wondering, “What does it mean to finance a car?” Or, “What is financing a car?” Well, let LaFontaine Kia break down this process and how it can offer plenty of benefits to you as a car owner.

How Does Financing a Car Work?

If you want to finance a new or used vehicle, one of the first things you’ll have to do is apply for a loan through a dealership, bank, or credit union. Drivers can begin by submitting the application online, or apply in person at the dealership. Since financing also hinges heavily on a good credit score, if you don’t have the best credit history, you may want to see if a dependable family member or close friend can co-sign your loan. No matter where you apply for financing, lenders will typically assess the following:

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

Choose Your Lender

Once you’re approved for a car loan, you’ll have several options when it comes to possible lenders. You can go the traditional route and see the offers you will get from your local credit union or bank, but some dealerships also offer in-house financing where you can skip the bank and work directly with the dealer as your lender. Always remember that the decision is yours, so choose what works best with your budget. To help you get a better idea of which offer is better, calculate how much money you can put down, how much your monthly payments will be, and how soon you’ll be able to pay back the loan.

Finalize the Loan Terms

The final step of the car buying process can be challenging, as this is the point where you will need to negotiate the price with the dealer. This may entail some back and forth between both parties, but once an interest rate is settled on, you can sign all the necessary paperwork, take delivery of the vehicle, and get back on the road.

Learn More About Car Financing at LaFontaine Kia

So, how car finance works is fairly simple, right? Let the LaFontaine Kia finance department help you find the new or certified pre-owned Kia model you’re looking for at a price that suits your best. To save even more, you can check out our new vehicle and used vehicle specials. Contact us today to learn more or to schedule a test drive near Canton and Southfield!

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2027 S Telegraph Rd • Dearborn, MI 48124

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LaFontaine Kia 42.2964843, -83.2707541.