How Does Car Financing Work?

Handing Over Car Key

When it’s time to purchase a used or new car for an upgrade to your daily drives around Bloomington-Normal, you can either buy the car outright, lease it, or apply for financing. Many people finance, but if this is your first or second car, you may not quite know how that works. What does it mean to finance a car? How does financing a car work? The team at Sam Leman Toyota Bloomington is here to help you understand so you can enjoy a well-informed and stress-free car-buying experience.

How Does Financing a Car Work?

The first step to learning how car finance works with a new or used vehicle is to apply for the loan either through our Bloomington dealership, a bank, or a credit union. The application can be started online, or you can apply for an auto loan right here at Sam Leman Toyota Bloomington. There are factors that the lender – financial institution – will look at, which includes:

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

If you have a low credit score or fairly weak credit history, you may need to ask a family member or close friend cosign the auto loan.

Choose Your Lender

One approved for your auto loan, you may have a few different financing options to choose from. If the dealership offers an in-house financing deal, you can compare their offer to a bank or credit union offer to see which is the best deal for you. Look at how much money you can put down, and how much your monthly car payments will be to ensure you can pay off the loan without any problems.

Finalize the Loan Terms

Before finalizing your auto loan and buying a car, you may need to negotiate on price. If this is the case, you and the Sam Leman Toyota Bloomington salesperson can go back and forth until you settle on a loan with an interest rate that makes you happy.

After finalizing the auto loan terms, you can then close the deal. You will sign all of the necessary paperwork and drive home to the Morton area in your new Toyota vehicle.

Closing the Deal with Handshake

Want to Know More About Car Financing in Bloomington?

Would you like additional information about the financing process or trading in a financed car? Contact us online or stop by our Springfield-area dealership to speak with a member of our finance department.

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