How Does Financing a Car Work?

When you’re shopping around the Orange County area for a new Kia model, you may be eager to learn the answer to: “what is financing a car?” When you’re wondering how car finance works, our team at Kia of Cerritos is always ready to help! In our guide below, our helpful and resourceful finance team is here to take you through the answer to “what does it mean to finance a car?” Read on below and be sure to contact us with any questions like “how does financing a car work?”

What is Financing a Car? 

So, what does it mean to finance a car, and how does financing a car work? When you’re ready to purchase a new Hyundai or used vehicle as a Cerritos driver, you may need some help from a bank, credit union, or our dealership (lender) to fund your new investment. This means the lender will supplement your purchase by providing you a loan. 

Over time, you will pay the lender back in monthly payments which factor in the overall loan amount, as well as the predetermined added interest rates. One major benefit of financing is the option to eventually refinance your loan terms if your financial situation improves throughout the course of the loan!

How Car Finance Works

To get an auto loan, you’ll want to shop around Los Angeles area banks, credit unions, and talk to our finance team about your purchase. You will then get quoted an interest rate on your car loan. Shopping around to multiple lenders ensures you are getting fair, competitive interest rates. Your interest rate is determined by considering the following factors:

• Your credit score
• Length of loan term
• Your debt-to-income ratio
• Age of the desired vehicle
• Down payment amount

Contact our Kia of Cerritos Finance Team Today

Now that you know how car finance works, you can stop by our Orange County-area Kia dealership prepared to take home the perfect car, crossover, or SUV. No matter what your current driving needs are in Los Angeles, our team at Kia of Cerritos how car finance works. If financing doesn’t sound like the best route for you, don’t forget to ask our finance team how a Kia car lease can help you take home the transportation you need!