How Does Car Financing Work?

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When it’s time to buy a new or used car at Brown Honda of San Angelo for your commutes from Lubbock, the process will be much easier and less stressful if you can answer the question, “How does car financing work?” The helpful team in our finance department is here to break it down for you.

How Does Financing a Car Work?

The first step in financing a car is to apply for financing, which you can do from home with us. You can also apply through your bank or credit union, but when you apply through Brown Honda of San Angelo, our finance team will do the legwork to get auto loan rates from multiple sources, which saves you time, energy, and money.

When you apply for a loan lenders will look at several factors in deciding your auto loan interest rate in Midland:

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

If you know your credit score is low or you don’t have a strong credit history, consider asking a family member or close friend to cosign your loan.

Choose Your Lender

When you’re approved for a loan from several sources, you’ll have some choices to make. Some factors to consider: if the dealership offers in-house financing like Brown Honda of San Angelo, you can compare their offer to a bank or credit union offer to see which makes the most sense for your needs and budget. How much money you spend on a down payment, and how much your monthly payments will be to ensure you will be able to pay back the loan.

Finalize the Loan Terms

At this point, you can finish negotiating the final price of your car to make sure it’s affordable with the interest rate of your loan. Then you can finalize the terms of your loan — that is, the amount of time you need to repay the loan. Then you can close the deal and drive home to Odessa in a new car that fits your budget for the long run.

Learn More About Buying a Car in San Angelo

An educated shopper is a happy shopper, and Brown Honda of San Angelo can help! Check out our car buying tips, and contact us with any questions you have about how car financing works, or any other aspect of the buying process.

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