How Does Car Financing Work?

Purchasing a used or new car for commuting between Hermitage and Nashville means purchasing outright, leasing, or applying for financing. But what is financing a car anyway? If you’re asking yourself, “What does it mean to finance a car?” and “How does financing a car work?” our experts are here to teach you. Read this handy guide below for a less-stressful and more well-informed buying experience.

How Does Financing a Car Work?

The easiest way to learn how car finance works is to apply for a loan. Once you’ve selected a new or used vehicle, start your finance application online, or go straight to the dealership. Factors that your lender will look at include:

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

Low credit score? No strong credit history? Ask a family member or close friend to cosign.

Choose Your Lender

You will likely have a few different loan options to decide between if you’re approved. With in-house financing, for example, you can compare a dealer’s offer to a bank or credit union’s to see which works best for your budget. Decide how much money you can put down, and how much your monthly payments will be so you can be sure you’ll be able to meet the terms of your agreement.

Finalize the Loan Terms

You may need to negotiate the price of your car purchase before finalizing your loan. If that’s the case, you and the salesperson will go back and forth until settling on an interest rate that makes sense. When you get to that point, the loan terms will be finalized, and the deal will close. Then you’ll sign all the necessary paperwork, take delivery of the vehicle, and park it in your driveway or garage!

Want to Know More About Car Financing in Madison?

To learn more about the automotive finance process, contact us or just visit our dealership to speak to a member of our finance department in Madison. 

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2210 Gallatin Pike N. • Madison, TN 37115

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Bob Frensley Chrysler Jeep Dodge Ram FIAT

2210 Gallatin Pike N. Madison, TN

Phone: 615-528-5104

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Phone: 615-528-5104

2210 Gallatin Pike N. Madison, TN

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2210 Gallatin Pike N. Madison, TN

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2210 Gallatin Pike N. Madison, TN

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2210 Gallatin Pike N. Madison, TN
36.30741 -86.6838
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Bob Frensley Chrysler Jeep Dodge Ram FIAT
Bob Frensley Chrysler Jeep Dodge Ram FIAT
2210 Gallatin Pike N.
Madison, TN, 37115 US
615-528-5104
https://di-uploads-pod19.dealerinspire.com/bobfrensleychryslerjeepdodgeramfiat/uploads/2019/03/BobFrensleyChryslerJeepDodgeRamFIAT.png
Bob Frensley Chrysler Jeep Dodge Ram FIAT 36.30741, -86.6838.