A Beginner’s Guide to Car Financing

Whether you’re buying a used car or a new one, car financing can be a challenge for any driver. When you finance your new car through your dealership, you can streamline the process and get a much better financing deal. Learn everything you need to know about the car dealership financing process and how to make a good deal. 

A Beginner’s Guide to Car Financing at a Car Dealership

At the dealership, most of the heavy lifting for building your financing plan is done by the dealership’s finance department. The finance experts will compare interest rates to find you the most competitive offer and can tailor your financing plan to meet your monthly budget. The three basic steps of this process include:

Assess Your Credit Score

Your credit score has a massive influence over the interest rate you will get for your auto loan. Borrowers who have good credit will typically have a much lower interest rate on a loan, while borrowers who have a low credit score will have a higher interest rate. Having no credit history can also cause your interest rate to be high. Fortunately, your dealership will lend to you even if you have a bad history. 


If you want to get a better interest rate on your loan, you can work to clean up your credit score before you submit your application. You can improve your credit rating by paying down debts or making on-time payments. You might need to give this process a few months before your credit score reflects these changes.

Get Pre-Approved

Next, you can submit an application for an auto loan at your dealership to get pre-approved. The pre-approval step is essential since this will tell you how much you can afford for your auto purchase. The pre-approval step will also help you assess different interest rate offers. When you apply for pre-approval at your dealership, you will generally get results back within a few hours or days. 

Finalize a Finance Plan

Finally, you will be able to finalize the terms of your auto loan. You will select a loan term length from 24 to 72 months or more and make a down payment that can reduce the total cost of your loan. 

Making a good deal on your car purchase might depend on how well you can negotiate the price of your new vehicle. For many drivers, one way to negotiate is to use the trade-in value on an older vehicle. If you don’t have an old car to trade in, then you can ask your dealership about vehicles being sold at manufacturer discounts or look exclusively at used models so you can save money.


Financing your new car ultimately means finding an auto loan with an affordable interest and monthly payment. You can try strategies such as cleaning up your credit score to make your financing plan more affordable. Contact Randy Wise Auto Group to discuss your finance options today. 

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