How Does Financing a Car Work?

Car Key and Document​    

Even a small car like a new Ford Focus can be tough to afford without saving up quite a bit, and that’s to say nothing of a full-size truck like an F-150. Most people get help -- they finance their purchase with a loan -- but how does car financing work? Auffenberg Ford Belleville is here to break down the financing basics so you can understand how car finance works and get on your way toward an affordable new or used car.

What Does it Mean to Finance a Car?

It doesn’t matter if you’ve lived in St. Louis and biked everywhere or are a Fairview Heights teen shopping for their first used car: you probably know what a car loan is. Most drivers don’t just have the cash lying around to buy a new car, and even if they do, it’s not always the best financial move. Instead, drivers put a down payment toward the cost of the vehicle and use a loan from a bank to cover the rest.

The process is pretty easy, too:

  • Save up toward a down payment
  • Shop around for the car you want
  • Get a quote on any trade-in car
  • Take your next car for a test drive
  • Sign the financing paperwork
  • Drive home your new car

Once the loan is paid off, the driver officially owns the car, but you can and should treat it as though you own it until then. Make modifications, add on accessories, and keep it clean and well-maintained. You can also finance a used car -- just be sure to go over our used car buying checklist first.

Should I Finance at a Dealership?

One of the biggest advantages of financing these days is that you can do it right at the car dealership. Why finance through a dealership instead of a bank?

  • Dealerships can pull up auto loan offers at a number of banks
  • They offer perks like reduced interest rates in exchange for added warranty or maintenance coverage
  • Special financing offers are available, often backed by national incentives
  • Many dealers are more flexible about drivers with bad credit

Finance at Auffenberg Ford Belleville Today

If you have any questions about the financing process or want to get started, just contact our finance team. And don’t forget that leasing is also a great option for drivers looking to stay behind the wheel of the latest cars.

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