If you have ever wondered how auto financing works at a dealership, you are not alone. Many first-time buyers find the financing process confusing or intimidating. At Speck Motors, we believe every customer deserves a clear and honest explanation of how automotive financing works. Here is everything you need to know about getting a car loan at a dealership.
What Is Auto Financing?
Auto financing is the process of borrowing money to purchase a vehicle. Instead of paying the full purchase price upfront, you make monthly payments over a set loan term. Most auto loan terms range from 24 to 84 months depending on the lender and your situation. At the end of your loan term, you own the vehicle outright with no further payments required.
How Does the Process Work?
Step 1: Choose Your Vehicle
The purchase price of your vehicle directly affects your monthly car loan payment. A lower purchase price means a smaller loan amount and a more manageable monthly payment. Our sales team will help you find the right vehicle across our new and used inventory.
Step 2: Complete a Credit Application
Our finance team will ask you to complete a credit application with basic personal and financial information. We then shop your application across multiple lenders simultaneously. That process is one of the biggest advantages of auto financing at a dealership versus a bank or credit union.
Step 3: Our Finance Team Shops Your Application
Our finance team submits your application to multiple lenders at the same time. Each lender reviews your application and responds with a loan offer. Our finance team presents you with the best available options for your specific situation. You select the offer that works best for your budget.
Step 4: Review Your Loan Terms
Before signing anything, our finance team reviews every detail of your auto loan with you. That includes the purchase price, interest rate, loan term, monthly payment, and total cost. There are no surprises and no hidden fees at Speck Motors.
Step 5: Sign and Drive Away
Once you are comfortable with your car loan terms, you sign the paperwork and drive away. Our finance team handles all paperwork including title transfer and lender documentation. The entire automotive financing process at Speck Motors is designed to be fast and stress-free.
Key Auto Financing Terms You Should Know
Interest Rate (APR)
The interest rate is the cost of borrowing money expressed as an annual percentage. A lower interest rate means less money paid in interest over the life of your car loan. Your credit score is the biggest factor in determining the rate you qualify for.
Loan Term
The loan term is the length of time you have to repay your auto loan. Longer terms mean lower monthly payments but more total interest paid over time. Shorter terms mean higher monthly payments but less total interest paid.
Down Payment
A down payment reduces the amount you need to finance and lowers your monthly car loan payment. Most lenders prefer a down payment of at least 10 to 20 percent of the purchase price.
Trade-In Value
Your trade-in value can be applied directly toward your new vehicle purchase just like a down payment. Washington State also offers a trade-in tax credit that reduces the taxable purchase price of your next vehicle.
Credit Score
A higher credit score typically means a lower interest rate and better loan terms on your auto loan. A lower credit score may result in a higher rate but auto financing may still be available through our lender network.
What If I Have Bad Credit or No Credit?
At Speck Motors, we work with buyers at every credit level every single day. Bad credit, no credit, and first-time buyers are all welcome at our dealership. We work with a wide network of lenders who specialize in non-traditional automotive financing situations. A larger down payment, proof of stable income, and a co-signer can all significantly improve your chances of auto loan approval.
What Documents Do You Need?
Bring the following when you visit Speck Motors:
- Valid government-issued photo ID
- Proof of income including recent pay stubs or bank statements
- Proof of residence including a utility bill or lease agreement
- Proof of active auto insurance
- Down payment in the form of cash, check, or trade-in vehicle
- Your Social Security Number or ITIN for the credit application
Ready to Get Started?
Ready to apply for auto financing at Speck Motors in Sunnyside? Here is how to get started:
- Online: Visit our website and use our pre-qualification tool
- By Phone: Call our finance team directly to discuss your situation
- Walk-In: Stop by during business hours and our team will be ready to help
Whether you are financing your first vehicle or your fifth, our team at Speck Motors is committed to finding you the best possible car loan for your budget. Come see us today.
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