Get Directions

15701 West Colfax Ave, Golden, CO, 80401Denver

How Does Car Financing Work?

Signing Finance Documents for Car

If you’ve decided that you want to purchase a new car to enhance your Denver commute, you have a few options. You can get a lease, buy it outright, or choose a very common option: car financing. So, what does it mean to finance a car and how does financing a car work? We get questions like this a lot at Planet Honda, so we’ve compiled a brief guide for how car finance works below!

What is Financing a Car?: Figures to Know 

Financing is agreeing to a payment plan with a lender on a new or sometimes used vehicle. This lender could be a bank, a credit union, or also a Lakewood-area dealership with a finance center. In all these cases, the lender is going to need important information from you that can affect the loan amount, down payment, interest rate and payment plan. Here’s what that includes:

 

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

If you’re worried about your credit score, know that it’s possible to get bad and no-credit car financing with a dealership.

What Does it Mean to Finance a Car with a Dealership vs. Bank?

Arvada drivers have options when it comes to car loans. If you know how car finance works, you should be able to secure the best possible loan for you. Take into account the following factors on your budget: 

  • Down payment
  • Interest rate
  • Loan Term 
  • Monthly payment amounts 
  • Insurance rates 

So, what does it mean to finance a car with a dealership? An in-house finance center at a dealership can settle a car loan in the same place you’re buying a car. To make comparing loans easy, you can use an online payment calculator

How Car Finance Works: Finalizing the Loan Terms

For those asking, “How does car financing work?”, it’s important to know that you can (and should) negotiate the loan terms before you sign the dotted line. If you have a goal for monthly payments, you should be vocal about it and a lender will help you out. Once you’ve settled on good loan amounts and terms for you, you can take delivery of the vehicle and drive it home!

Get Car Financing at Planet Honda!

 And that’s a brief way to answer the question, “What is financing a car?”! Golden-area drivers who are on the market for a new vehicle can get car financing at the in-house finance center at Planet Honda. You can even securely apply for financing through us online! Contact us today with any questions about car financing and we’ll be happy to help!

More from Planet Honda

  • 2022 Honda Accord Interior Features

      If you’re in the market for a brand new sedan to enhance your Denver travels, then you’ll find the 2022 Honda Accord interior offers everything you need and more. With a relaxing and versatile cabin along with stunning standard and available features, this Honda sedan meets your needs to keep moving with ease. Get…

  • 2022 Honda Odyssey Interior Features

    If you need an accessible, family-friendly van that can keep you moving with ease around Denver, then you’re sure to be impressed with the spacious 2022 Honda Odyssey interior. With enhanced seating and storage space to accommodate your daily travels, along with many advanced cabin technology and convenience features, this Honda van is sure to check…

  • 2021 Honda Passport, Great Performance and Price!

    Denver drivers looking for the perfect midsize SUV that offers plenty of exciting enhancements are sure to love the 2021 Honda Passport. No matter if you’re new or familiar with this stunning Honda lineup, you’ll appreciate the competitive pricing and advanced performance and cabin features you expect in a Honda vehicle. Discover which suits you best…

Planet Honda 39.7301721, -105.177084.