How Does Car Financing Work?

Hands Doing Calculations with Calculator

If you are in the market for a new car in the Manchester area, you have the option of purchasing it outright, leasing it, or applying for financing. What is financing a car, and what does it mean to finance a car? A common question we hear at the dealership is, “How does financing a car work?” Our finance experts would be more than happy to explain the process so you can decide if this is the right method for your driving needs and budget.

How Car Finance Works

If you are wondering how car finance works with a new or used vehicle, the first step in the process is to apply for the loan through the dealership, a bank, or a credit union. At Tulley BMW of Nashua, you can apply online from the comfort of your home, or you can complete your application at the dealership. Factors that the lender will look at include:

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

If your credit score is less than ideal or you have yet to establish credit, consider asking a family member or close friend to cosign your loan.

Choose Your Lender

If your application has been approved, it is possible that you will have a few different lenders to choose from. If the dealership offers in-house financing, you can compare their offer to a bank or credit union to see which is a better value for you. After receiving your offer, consider a down payment amount and calculate your monthly payments to make sure that you are capable of making your loan payments.

Finalize the Terms of the Loan 

If you decide to negotiate on price and come to an agreement on a loan with an interest rate that works for you, it’s time to finalize the terms of the loan. To do so, sign all the necessary paperwork, take delivery of the vehicle, and you are good to go! You can now hit the Lowell, MA roads in the vehicle of your dreams. 

Tulley BMW of Nashua Makes Car Shopping Hassle-Free

If you have additional questions about automotive financing, or if you are wondering whether leasing or financing is right for you, do not hesitate to contact the team at Tulley BMW of Nashua.

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(603) 888-5050

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147 Daniel Webster Hwy • Nashua, NH 03060

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Open Today! Sales: 8am-6pm

Open Today! Service: 7:30am-5pm

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Tulley BMW of Nashua 42.729283, -71.447886.