How Does Car Financing Work?

Most of us don’t have the money to buy a new car with cash. That’s why most Cerritos drivers choose to finance their car purchase, even for used cars. What does it mean to finance a car? It means borrowing money to pay for the car, then paying it off in monthly installments. How does financing a car work? We’re here to help our customers get behind the wheel of their next car, so we’ve put together the guide below on how car finance works.

How Car Finance Works When You Go Through a Dealership

What does it mean to finance a car through a dealership? This is the easiest way to finance a car is to do it through a dealership. For one thing, you can find your car and secure the money to buy it all in one stop. And dealerships like ours are motivated to help you buy a car, so we’ll work with customers with all kinds of credit.

Dealerships also often work with multiple lenders. That’s good for you. Instead of traipsing around Long Beach, visiting every bank to see who has the best deal, the dealership can apply for you to multiple lenders at once.

How Car Finance Works When You Go Through a Bank

Some Cerritos drivers prefer to shop for lenders on their own and secure financing from a bank instead of going through the dealership. What does it mean to finance a car through a bank? This method requires shopping around with multiple lenders in order to get the best deal. This is certainly less convenient than going through a dealership, and most folks don’t have the time or the inclination to physically check with several lenders. This often results in the customer taking the first rate they’re offered, which doesn’t normally result in the best deal. The lender will want to know the following:

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

Finance Your Car at Lexus of Cerritos

Our helpful finance department would be happy to walk you through all of your options and help you find just the right deal for your circumstances. And, while you’re here, check out our post on how long you can finance a used car. We’re just a short drive away from Torrance. So, drop by or contact us today!