How Does the Car Financing Process Work?

Much about car buying has changed in recent years, from how shoppers do their research to the actual features available in many of today’s vehicles themselves. One thing, though, has remained somewhat of a constant: The car financing process is still a mystery to many, especially first time buyers. But it doesn’t have to be. Let’s break down the basics.

Car Financing 101: Your Options

Car financing essentially boils down to two choices: You can buy with a loan (or pay outright), or you can lease. There are specific conditions and benefits to both. 

Loan

Once you’re set on buying a new or used car, a finance representative will work to determine three things: the total amount you’re borrowing, the interest rate you’ll pay (or the APR), and the amount of time you’ll have to pay it. 

When you work with one of Zimbrick’s finance professionals, you can rest assured that you’re receiving the most competitive rate possible. We have strong relationships with many reputable lending institutions, as well as experience with budgets of all sizes. In addition, each of our dealerships offer a pre-approval process and tools such as payment calculators.

Drivers who decide to finance with a loan enjoy the freedom and equity of ownership. Customization, trading, and selling at a later time are all at the discretion of the owner. There are no mileage limits, and once you’ve paid off your agreement, the car is yours.

Lease

If you’re like many car shoppers, you may be new to the concept of leasing, or you might have reservations. There’s no need to fret, though. Leasing is a great option for those who aren’t ready to commit to ownership and for those who don’t desire a long-term stake in a vehicle. 

As a lessee, you’ll only pay for using the car, not the car itself. As with a loan agreement, you’ll likely have a down payment and a financial rate that’s similar to the APR. The term of your agreement, however, will be much shorter. Our salespeople are happy to go over all the details with you.

Leasing will appeal to you if you’re looking to put less money down, avoid upfront sales tax, and obtain a lower monthly payment on average. While there are restrictions, including the number of miles you can drive, your vehicle will typically be under warranty for the duration of the contract. That means you aren’t as likely to be subject to expensive repair and maintenance costs. And when it’s all said and done, you have the option of a buyout at the end of your term.

Finance Your Next Car in Madison, WI

Now that you know a little bit more about the financing process, it’s time to get the wheels turning. Visit one of our dealerships in the Madison, Wisconsin, area today. Our finance professionals are ready to help you explore all your options for car buying.

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