What to Expect When Financing A New Car | Terry Reid Mitsubishi | Cartersville, GA
If you’ve never financed a new car — or it’s been a while since you last financed one — you may be wondering what you should expect. Luckily, dealership finance departments are there to answer whatever questions you may have, but here’s a brief guide to assist you as well.
Determine your budget: The first step to financing a new car is setting your budget. This will help guide you through the financing process, ensuring that your monthly payment is affordable for you.
Expect a credit check: Wherever you apply for an auto loan (from a bank, dealership, credit union, or someplace else), you can expect that your credit will be checked. While a low credit score likely won’t prohibit you from taking out an auto loan, it may influence what loans and interest rates you’re offered. If you’re concerned about your credit score, there’s always the option of delaying buying a new vehicle until you’ve had the opportunity to raise your credit score a bit.
Expect to provide a variety of documentation: When financing a new car, you can expect to be asked for the following documentation: proof of identity, like a driver’s license; proof of income, like your pay stubs or tax return; proof of residence, like a utility bill; and proof of car insurance.
Expect to negotiate your trade-in vehicle’s value, if applicable: If you’re trading in your current vehicle for a new vehicle, you can expect to have to negotiate the value of your current vehicle with the dealership. To prepare for this, you should know what your vehicle is worth using an online car appraisal tool or by having your vehicle appraised at multiple locations.
Expect financing jargon: As you go through the financing process, you’ll likely hear a lot of financing jargon. One term you’ll want to pay attention to is your interest rate, which is essentially the lender’s charge for borrowing the loan. The lower your interest rate, the better.
To learn more about financing a new vehicle, visit our finance department at Terry Reid Mitsubishi.