How Does Car Financing Work?

If you’re ready to purchase a new or used car near Arlington, you might be asking yourself “How does financing a car work?” or “What does it mean to finance a car?” If you’re wondering how car finance works, then read our handy guide, found herein. Financing a car takes several steps and requires some financial disclosures, but it doesn’t have to be needlessly complex, at least of you choose to finance with us at Alexandria Volkswagen! 

What Does It Mean to Finance a Car?

The first step in learning how car finance works is to apply for your loan. You can do this at the dealership or go to your local bank or credit union. It’s often easier to go with a dealership like Alexandria Volkswagen because of the convenience of financing and purchasing all in one place. Regardless, though, your lender will look at the following components to determine your loan:

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

If you know you have a low credit score or weak credit history, consider asking a family member or close friend to cosign your loan.

Choose Your Lender

This is the next step in learning the definitive answer to the question “How does financing a car work?” If you’re approved, you’ve got a few options to choose from. If you choose a dealership with in-house financing like Alexandria Volkswagen, you can compare our offer to another Springfield bank or credit union to see what makes the most sense for what you need and what your budget is. Consider your down payment size and what your monthly payment will be when checking against your budget.

Finalize the Loan Terms

This is the final step in figuring out “What does it mean to finance a car?” You’ll negotiate on price on your Springfield car, then once that’s done, you’ll finalize the loan terms and close the deal. You’ll sign the paperwork, take delivery of the vehicle, and drive home.

Alexandria Volkswagen Is Your Car Financing Superstore

Want to learn more about the automotive finance process? Knowing how car finance works makes you a more educated shopper. Contact us today to get the conversation going!