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How Does Car Financing Work?

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Financing a new or used car simply means taking out a loan and paying for your car in monthly installments. That way, you can drive your Chevy off the lot right away, and then pay for it at a pace you can afford. You have a few different options when it comes to financing. For example, how does financing a car work if you have bad credit, or you want to take a loan directly from your dealership? Read below for an overview of your financing options in Eugene.


What Does it Mean to Finance a Car?

How car finance works depends on several factors, including your unique financial situation and whether you choose to finance with your bank or directly through your dealership. Lenders will consider your full financial picture in their decision to offer you a financing deal. The following factors help determine your loan eligibility for lenders:

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

Finding a Financing Plan that Works for Your Budget

What is financing a car compared to leasing? When you finance, you make payments toward ownership. Leasing allows you to rent use of the vehicle and return it to the dealership at the end of your lease term. Monthly lease payments are typically lower than financing payments, but you also have options for negotiating lower financing payments if it’s important to you to own your vehicle.

Before you apply for financing, figure out how much you can afford to pay each month, or use our monthly payment calculator to find an accurate estimate. Here are a few points to keep in mind as you start your search for a lender:

  • Low or no credit? Making a large down payment can help convince lenders to offer you a lower interest rate.
  • Trade-in your current car. Value your trade-in with us and subtract that amount from the price of your new vehicle.
  • Draw up an accurate budget. Remember to include fuel, insurance, and maintenance costs when calculating your budget.
  • Determine the highest possible payment without the risk of falling short. Cottage Grove drivers can enjoy significant savings with a higher monthly payment, but late payments can damage your credit.
  • Submit all your financing applications within two weeks. If you apply for financing with multiple lenders, submit all of your applications within the same two weeks to prevent damage to your credit score showing up on an application.
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Explore Your Auto Financing Options in Roseburg

Ready for your next steps? Contact the finance experts at Clint Newell Chevrolet to be sure you’re aware of all your options. We’ll work with you one-on-one to find a pre-owned or new Chevy model you love at a price you can afford. Check out our special financing offers and service specials for Sutherlin-area drivers!


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