How Does Car Financing Work?
If you’re shopping for a new-to-you vehicle for your daily drives through Long Island City, then you may be wondering how car financing works and what steps you need to take in order to secure a car loan. Financing a vehicle is easier than you think, read along with Major World to learn what it means to finance a car and take the first steps to securing a car loan or lease with our finance team!
How Does Financing a Car Work?
The first step you need to take when you shop for a new or used vehicle is to apply for a loan through a dealership, a bank, or a credit union. Most Queens car dealerships have an online finance application you can fill out at your home. After you apply, your application will be reviewed, this is what the lender will look at to determine your eligibility:
- Credit Score
- Loan Amount
- Length of Loan
- Debt-to-Income Ratio
- Age of the Vehicle
If you’re concerned your credit score or your credit history will impact your ability to get a vehicle loan, read our guide on how to finance a vehicle with no credit or a low credit score. You can also improve your chances of being approved by cleaning up and raising your credit score as much as possible before you apply. Doing things like paying off other loans or using a credit card to make small purchases you can pay off right away will help raise your credit score.
Choose Your Lender
If you are approved for a loan, you may have a few different lenders to choose from. If your chosen Brooklyn dealership offers in-house financing, you can compare their offer to the offer from your bank or a credit union. Carefully read each offer – including the fine print – to see what the loan entails. Take special note of any loan stipulations, how much money you can put down, and how much your monthly payments will be. At this point it’s a good idea to double-check your budget to ensure you’ll be able to make your payments on time and in full.
Finalize the Loan Terms
After you’ve decided which offer to accept, you may need to negotiate the MSRP. In this case, you’ll want to use resources like Cars.com, Edmunds, and Kelley Blue Book to see what other people have paid for the vehicle you’ve chosen in your area. With this information, you and the salesperson can negotiate the price until you settle on a loan with an interest rate that works for you. With an agreed-upon price, all you’ll need to do is sign the paperwork, and soon you’ll be driving home in your new-to-you vehicle!
Learn More about Car Financing with Major World
Now that you know how car financing works, read our other car buying tips to learn more about how to lease a used car, the questions to ask before buying a used car, and much more! You can also visit our Long Island City showroom to see our large inventory and find the right vehicle for your daily drives in Bronx and even trade-in your vehicle for extra savings on your purchase. Come by today, we look forward to putting you behind the wheel of a new-to-you vehicle!
