How Does Financing a Car Work?

car keys on top of calculator

Have you ever wondered how car finance works? What does it mean to finance a car, anyway? If you’re looking into financing, you’ve decided that buying, rather than leasing, is the right choice for your day-to-day. Some drivers may be able to purchase a vehicle outright, but for most of our neighbors, you’ll need to finance your purchase by taking out an auto loan!

So, how does financing a car work near Scottsdale? Although taking out a loan can be daunting, the process is actually very straightforward. All you’ll need to do is:

  • Apply for a loan at various locations
  • Choose the best package
  • Finalize the terms with your lender

Then, you’ll work towards full ownership by paying off that auto loan over time! It’s really that easy when you drive with Land Rover North Scottsdale.

Step 1: Making Your Loan Application

If you really want to learn how car finance works, you’ll need to dig deep and get some practice with the application process. The first step is to apply for a loan through a bank, a credit union, or a dealership. It’s a good idea to shop around and see where you can get the best deal, but remember to make all of your applications within a 14-day window. This will limit the impact of potential negative credit reporting.

No matter where you apply for financing, the lender is going to look at several factors to determine if you’re eligible for the loan. These include:

  • Your credit score
  • The full amount of the loan
  • The length of the loan
  • Your debt-to-income ratio
  • The age of the vehicle

How does financing a car work with no credit or bad credit? Since any of these factors could impact your approval, there are numerous ways to improve your chances if you have trouble getting approved.

What is financing a car going to do for your credit? If you make all of your payments on time, you can boost your score by a significant margin. That means you could end up getting an even better interest rate when you start the financing process again.

Step 2: Choose Your Lender

Next, it’s time to compare your offers and choose a lender. You can use our monthly payment calculator to plug in different interest rates and loan lengths, and get an immediate view of how these will affect your monthly payments.

The important thing to remember here is that your interest rate isn’t the only thing that you should consider. Carefully review the entirety of each offer, paying attention to how the length of the loan will impact the total amount paid over time.

You want to choose the option that’s best for your monthly budget, but if you stretch things out too long, you could end up paying a lot more than you should!

Step 3: Finalize the Loan Terms

You’ve now reached the final stage in the auto financing process, but the fun’s not over yet. Now that you’ve been approved, and you’ve chosen a lender, you have a chance to negotiate with the dealership on price. Do your research before you drive in from Paradise Valley or Carefree.

If you’re financing with the dealership, you can also use this sit-down meeting to explore finance and insurance options, including protection plans and extended warranties. Once you’ve selected everything you want, simply finalize the loan term, close the deal, and drive home in your new or new-to-you Land Rover.

Get the Process Started with Land Rover North Scottsdale!

When you want to finance a new or used Land Rover, our financing department be by your side from start to finish. You can even apply for financing online, today!

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(855) 559-3222

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18100 N Scottsdale • Phoenix, AZ 85054

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Land Rover North Scottsdale

18100 N Scottsdale Phoenix, AZ

Phone: (855) 559-3222

http://maps.google.com/?q=18100%20N%20Scottsdale%2C%20Phoenix%2C%20AZ%20%2C%20Ph%2C%20AZ%2085054

Parts

Phone: (877) 704-6122

18100 N Scottsdale Phoenix, AZ

Sales

Phone: (855) 559-3222

18100 N Scottsdale Phoenix, AZ

Service

Phone: (877) 704-6950

18100 N Scottsdale Phoenix, AZ
33.650245 -111.9262896
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Land Rover North Scottsdale
Land Rover North Scottsdale
18100 N Scottsdale
Phoenix, AZ, 85054 United States
(855) 559-3222
https://di-uploads-pod6.dealerinspire.com/landrovernorthscottsdale/uploads/2016/07/Scottsdale.jpg
Land Rover North Scottsdale 33.650245, -111.9262896.