How Does Car Financing Work?

Finance Calculator

If you’re looking for a new vehicle in Fairview area near O'Fallon, Auffenberg Mazda is here to make the finance process quick and easy! How does financing a car work? It’s pretty straightforward, and we do our best to ensure you have plenty of options when financing your next car with us.

What is Financing a Car?

If you’re a new Collinsville or St. Jacob driver, you might be asking “What is financing a car?” or “What does it mean to finance a car?” That’s normal. Financing a car means using a loan to pay for the car. While you can go to a bank or credit union for a car loan, when you visit a dealership finance center, we are able to provide offers from multiple local banks so you can pick the rate and terms that are best for you.

When you take out a loan, you’ll usually have to pay back the money with interest. These are some factors used to determine your interest rate and loan eligibility:

  • Age of the Vehicle
  • Credit Score
  • Loan Amount
  • Repayment Term / Length of Loan
  • Debt-to-Income Ratio

If you have poor or low credit, lenders may require you to find a cosigner or offer you a loan with high interest!

Pen and Calculator

Which Finance Plan is Right for You?

First, you need to figure out how much you can comfortably afford to pay. Then, apply for auto financing online. Consider these factors below when finding out the right finance plan that fits you best:

  • Choosing to make a large down payment when you have poor credit can help reduce the high-interest rate. Before you apply for a loan, value your trade-in and calculate how much you can possibly put down.
  • Factor in the cost of insurance, maintenance, and gas when you do your budget math.
  • If you do apply at a bank or credit union, it’s in your best interest to apply to multiple and to do so over a short period of time. When we search for your financing options, we do it all at once. If spread out, it could negatively impact your credit.

Finance Your Car at Auffenberg Mazda

Do not hesitate to contact us at Auffenberg Mazda now that you know how car finance works. Before stopping in, make sure to check out our latest lease offers. When you lease a car, you’re financing just the depreciation on the condition that you’ll return it after a short period of time (usually about 3 years). We encourage you to learn more about good mileage for a used car if you’re considering financing a pre-owned vehicle! We can also help you learn how to buy a new car or compare models like the Mazda CX-30 vs. Mazda CX-3 to help you find the right model.

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(618) 622­-4513

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(618) 641-0002

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105 Auto Court • O'Fallon, IL 62269

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Auffenberg Mazda 38.5958138, -89.9596396.