How Does Financing Work?
Learn how to finance your next vehicle with Tradition Chevrolet GMC
Buying a car is a big decision, and for most people, it means exploring finance options. If you're curiouse about how car loans work or worried about your credit situation, you're in the right place! Here at Tradition Chevrolet GMC, we're dedicated to helping you drive home in the perfect vehicle, regardless of what your credit history looks like. Plus, we offer competitive pricing on our pre-owned cars, trucks, and SUVs. Read below to learn more about auto financing at Tradition Chevrolet GMC!
Contact us with the form below, or give us a call to get started on finding you the right vehicle at the right payment.
How do car loans work?
While you may have spent time researching the perfect vehicle, it's just as important to understand the financing process with just as much research. When you take out a car loan from a financial institution, you receive the money as a lump sum and repay it over time with interest. The size of your monthly payment depends on several factors:• Loan Amount: the total amount you need to borrow.
• Interest Rate: the percentage charged by the lender for borrowing the money.
• Loan Term: the length of time you have to repay the loan. Shorter terms usually mean higher payments but less interest overall.
• Down Payment: the initial amount you pay upfront. A larger down payment can lower your loan amount and monthly payment.
How do car leases work?
When you lease a car, you're essentially renting it for a set period – typically two or three years. Instead of paying toward ownership, you pay for the vehicle's depreciation during the lease term, plus interest and fees. At the end of the lease, you can either return the car, lease a new one, or in some cases, buy the vehicle. Below are some factors that effect your monthly lease payment:• Vehicle Price: the starting point of the car you choose.
• Residual Value: the estimated value of the car at the end of the lease. A higher residual value means lower monthly payments.
• Money Factor: similar to an interest rate, this determines the cost of financing the lease.
• Lease Term: the length of the lease. Shorter terms often have higher monthly payments but may offer more flexibility.
• Mileage Limit: most leases have a yearly mileage cap. Exceeding this limit can result in additional charges.
Worried about your credit score? Don't be!
If your credit score isn't where you'd like it to be, don't worry – you're not alone. Many people finance cars with less-than-perfect credit due to an array of life situations. Of course, knowledge is always power, so we're here to help you figure out where you are and how to get where you want to be when it comes to buying a car.To get started, we always recommend checking your credit score. Even if you happen to know your current score, it's always best to pull your own full report in order to understand the bigger picture. A lot of the time, you may have something simple weighing down your score that you can get taken care of to help shift you into the next credit tier.
Next, be sure to consider all your current monthly expenses and figure out what number would be the most realistic for you. You never want to make having a car more of a burden, so male sure to stick to your highest payment when financing your next vehicle.
We do the loan shopping for you!
While most of the big banks and lenders often have several credit requirements, there are always options to make sure you can drive home. There are several lenders we work with at Tradition Chevrolet GMC that offer subprime, second-chance, or bad credit loans for someone with either poor credit or no credit history. Lenders don't always look at just your score and credit history, they look to see how often payments are being made and how you handle your finances. They understand that credit is just one piece of the puzzle.Of course, this sometimes come with a higher interest rate, but shipping around for the perfect loan is just as important as shopping around for the perfect dealership – except we do all the shopping for you! When you come in to discuss your next car, we'll do all the work behind the scenes with our many lenders and financial institutions to make sure we get you the best rate for your budget. We'll show you the results, discuss the next steps, and make sure you're on the right track.
What's next?
Once you know your budget and where you stand on your credit report, the next step is to make sure you have everything you need before you visit us for your appointment!• Have a government-issued ID
• Proof of income (like recent pay stubs or bank statements)
• Proof of residence (such as a utility bill or lease agreement)
• Proof of auto insurance
Then, we take care of the rest! Our finance experts will help you through the entire process to make sure you leave with the right car at the right price!