How Does Car Financing Work?

Tiny car with coins and finance paperwork

When it comes time to purchase a new vehicle, whether it’s fresh off the production line or simply new to you, for your trips around Cleveland there are a few paths you can take. Namely, you can purchase the vehicle outright or apply for financing and let our dealership help you break down the price by paying month by month. What does it mean to finance a car? And how does car financing work?

If you’re asking yourself this question, our finance team at Metro Toyota is here to help you understand the process so you can enjoy a stress-free and well-informed car-buying experience. If you still have any questions, then don’t hesitate to contact us.

How Car Finance Works: Step-by-Step

What does it mean to finance a car? Many of the vehicles you see out on the road are financed! Financing a car means you take out a loan to help pay for the car over time through monthly payments, as opposed to buying it outright with cash. When the car is fully paid off, you become the owner!

Step 1: Apply for Financing

The first step when it comes to financing a vehicle is to apply for the loan through the dealership, a bank, or a credit union in the Parma area. You can start this process online or at our dealership in Brook Park, keeping in mind that the factors that the lender will look at include:

  • Your credit score
  • The loan amount and length of the loan
  • Your debt-to-income ratio
  • The age of the vehicle you are looking to finance

If you have a low credit score or you are working on building your credit score, consider asking a family member or close friend to cosign your loan.

Step 2: Choose Your Lender

Once you are approved for a loan a few options may present themselves. You may be able to get in-house financing from the dealership, which you can compare to the offer from a bank or credit union to see which makes the most sense for your needs and budget. You’ll want to consider how much money you can put down, and how much your monthly payments will be to ensure you will be able to pay back the loan.

Step 3: Finalize the Loan Terms

Prior to finalization and the purchase of the vehicle, you may want to negotiate on price. In this case, you and the lender can go back and forth until you settle on a loan with an interest rate that works for you. Once you achieve a price you can work with, you can close the deal, sign all the necessary paperwork, and drive home to the Brunswick area in your new-to-you model.

Learn More About What it Means to Finance a Car at Metro Toyota!

Now that you know how car financing works, the next step is to let the team at Metro Toyota make the car shopping experience better than ever. All you have to do is tell our team what you’re looking for, and we’ll help you find the right model in no time.  Visit our store at 13775 Brookpark Road, Brook Park, Ohio 44142

Do you want one of our team members to assist you in the process personally?
Please fill out the form below. or Call 216.267.7000

 

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