How Does Car Financing Work?

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Whether you're considering moves to purchase, lease, or get pre-qualified for financing on one of the new Hyundai models for sale at Suntrup Hyundai South, you might find yourself confused by the actual mechanics of how car finance works, or details like how much liability insurance costs. What goes into the final quote on price, payments, and insurance? Here, our finance department in St. Louis reviews the ins and outs of car financing in a handy guide to answer your question of "What is financing a car?" Read below, and contact us if you have questions!

Where Does Financing a Car Start?

If financing is an option you're considering for a new or used car purchase, start with a loan application through your dealership, bank, or credit union. At Suntrup Hyundai South, that application can be completed online, or in person at our showroom near Mehlville. All lenders consider a number of criteria when considering your application, including:

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

If you think your credit score is too low, or if you don't have a well-established credit history, you should also consider asking Afton family or close friends to co-sign your loan for the best deal.

Choose Your Lender

Financing options through each institution you evaluate will be made available to you once you're approved, which will give you an opportunity to compare offers head-to-head. This is a great time to evaluate your budget and needs, decide on a down payment, and review monthly installment schedules. Remember: Making payments on-time is important to keep your credit score high and keep the total cost of ownership down on your new or used car.

Finalize the Loan Terms

Once you know how much you can afford, it's likely you'll be able to negotiate on price with your salesperson. Savings programs and different financing arrangements can usually work in your favor and get the price down low enough for you to afford a vehicle that meets your specific needs. Once you've come to an agreement, you'll finalize loan terms and move to close, where you'll sign the paperwork, take delivery, and drive home to Fenton.

Want to Know More About Car Financing in St. Louis?

Learning more about the auto finance process and getting thorough answers to the question of "What does it mean to finance a car?" is easiest when you contact us in St. Louis. We can arrange a test drive, set up a meeting at our finance center, and get all of your questions answered before you make any commitment. Visit us today to get started!