One of the most complicated parts of buying a car, new or used, is figuring out how to pay for it. Most buyers choose to finance their purchase with a loan from a bank, credit union, or automaker. Today, getting financed has become a part of buying a car with many dealerships maintaining finance departments to help you, the customer. When it comes time to finance a car, knowing the basics is always helpful.
Before you receive any offers, you’ll need to fill out applications for loans. More often than not, financing through a dealership requires just one application. Applying for a pre-approved loan on your own could require multiple applications.
When you head out to buy a car, you’ll need to know your employer, income, expenses, rent (or mortgage), and social security number. If you have all this information from the get-go, you’ll be in good shape!
While knowing your credit score going into the dealership is good, it isn’t required. Lenders will check your credit history before offering you a loan.
After you’ve filled out the forms, banks, credit unions, and the dealership’s financing service (if there is one) will receive your application. From there, they decide whether or not to offer you a loan with an interest rate determined by your credit score.
After that, all you have to do is pick the best loan and accept!