How to Finance a Car

Do you plan on buying your next car? Chances are, you’ll need to finance that purchase. Whether you’re financing for the first time or simply want to brush up on best practices, our team at Macon Car Credit is here to help. We’ll show you how to finance a car the smart way.

It’s important to start thinking about financing well in advance—long before you step foot into the dealer’s showroom. We’re excited to share our tips with Milledgeville, Warner Robins, and Macon shoppers!

Know Your Credit Score Before You Shop

The almighty credit score—it affects every aspect of your life, whether you’re applying for a credit card, student loan, or mortgage. When you finance a car, your score will influence the interest rates for which you’re eligible, too. Those with the highest scores—typically, above 750 on the FICO® scale—often qualify for the lowest rates.

You can request one free copy of your credit report per year from the three major bureaus: Transunion, Experian, and Equifax. Many banks and credit card companies also offer free FICO® score reporting if you maintain an account with them.

Want to boost your chances of scoring low rates? Check out our tips to improve your credit score before you apply for financing!

Keep the Loan Term Short, if Possible

Why a shorter term? It’s simple: Shorter terms generally mean lower interest rates and higher monthly payments. It’s a better arrangement than the alternative—higher rates and lower monthly payments—as it adds up to less interest paid overall.

It may be tempting to stretch an auto loan over five, six, or even seven years. Those lower payments can look appealing! If you’d rather pay less in the long run, though, shorter terms are ideal.

It’s worth saying, too, that life is full of surprises. You never know where you’ll be five or six years down the road. Shorter terms give you more flexibility to deal with life’s uncertainties.

Make a Substantial Down Payment

There’s another way to score lower interest rates: Take out a smaller loan. Smaller loans translate to less risk on the part of the lender. The more you pay down, the better your chances of scoring low rates. We recommend a down payment of at least 20 percent, even if the dealer doesn’t require one.

This strategy will also help you avoid going “underwater,” or owing more than the car is worth as it depreciates. Should you find yourself in a situation where you need to sell the vehicle, you’ll be well-positioned to do so at a profit.

Learn More with Macon Car Credit

We hope these tips for how to finance a car come in handy! Feel free to reach out to our team at Macon Car Credit to learn more. We’ll make sure you understand every step of the finance process and how to make that process work in your favor.

Looking for an auto loan near Macon, Milledgeville, or Warner Robins? Feel free to complete and submit our online finance application. We’ll work in earnest on your behalf and move quickly to get you the car of your dreams!