If you’re not sure how financing a car works, here’s a quick walkthrough of some often-asked questions. This should help you gain a deeper understanding of how the process will go when you go in to buy or lease a vehicle.
When you buy a new vehicle, you own that car (or will eventually own it after you have paid off your auto loan). Once you pay off the vehicle, it’s yours for as long as it lasts. Leasing allows you to temporarily “own” a vehicle through a contract with a lessor that permits you to drive the vehicle for a negotiated length of time.
Financial institutions will look at your credit history and credit score to determine whether or not you are creditworthy enough to qualify for a loan. Likewise, a lessor will look at your credit score to determine if you reliably make payments on time.
A number of factors go into calculating your credit score. They include payment history, the amount you still owe, how long your credit history is, the different types of credit you have, and any new credit accounts you’ve opened recently.
Sometimes you can go to a bank or credit union and get preapproved for a loan. You can either do this or finance through the dealership.
Yes. When you trade in a vehicle to the dealership, you should bring any keys that belong to it, a certificate of title, and the owner’s manual.