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DMV Auto Financing

( people found this content useful.) 7 min read

What Exactly Is Auto Financing?

There is plenty to go into when talking about the subject of auto financing, but it’s crucial to define the term first before moving onto something else. Auto financing is essentially how you pay for your vehicle and this often means getting either a loan or a lease on your vehicle at the car dealership. Of course, you can always purchase the car outright if you have the money to do so. Every car dealership has its own finance department to discuss how you can pay for your vehicle. You can learn more about available financing by speaking to the finance department.

DMV Auto Financing

What is the Difference Between A Lease and a Loan?

A lease and a loan are the two main ways that you can finance a car if you get it from a dealership. If you go with a loan, one difference is that a loan works well for something that will still be valuable after the agreement has ended. A lease works better for a thing that depreciates in value quickly, such as a car. A lease does not involve a price that is based on risk, whereas a loan’s price is actually based on risk. Additionally, a lease’s term usually ranges from 12 months to a maximum of 60 months, while the kind of asset you are getting the loan for might limit the terms of the loan.

What Factors Determine My Auto Loan Rates?

There are quite a few factors that play a part in determining your auto loan rates. Of course, if you go to many different lenders, you will likely get varying rates at each lender. Getting a loan for a new or used vehicle, the loan’s size compared to the vehicle’s value, and your credit score are all factors that influence your auto loan rates. Your negotiation skills also affect your auto loan rates, as well. Another important factor is how long the term of the auto loan is, usually compared by examining the number of months in the loan term.

Is 0% Financing Actually a Good Offer or Not?

You might occasionally receive a financing offer that looks good at first but seems too good to be true. You should always make sure to pay attention to any fine print on a suspicious deal like 0% financing for your new vehicle. In reality, you may only get 0% financing on a new vehicle if you have a very good credit score or the 0% financing might end after just a few months when the interest rate returns. The price of the vehicle might also be higher than it should be to compensate for the 0% financing.

Top 5 Auto Finance Companies for a New Loan or a Refinance

If you’re in the market for a new car or looking to refinance your current auto loan, it can be overwhelming to navigate the many options available. To help you get started, we’ve compiled a list of the top 5 auto finance companies for both new loans and refinancing.

1. Capital One Auto Finance

Capital One Auto Finance offers competitive rates for both new loans and auto loan refinancing. They also have a streamlined application process and provide a range of tools and calculators to help you find the right loan for your needs. Capital One also offers pre-qualification, which allows you to see if you’re likely to be approved without impacting your credit score.

2. Wells Fargo Auto

Wells Fargo Auto also offers a range of loan options for both new purchases and refinancing. They pride themselves on their customer service and work to ensure that you receive a loan with payments that fit your budget.

3. Ally Financial

Ally Financial stands out for its flexible payment options and lack of fees. They offer both new loans and refinancing, and their user-friendly website makes the application process as simple as possible. Ally Financial also has a loyalty program with benefits for repeat customers.

4. Bank of America

Bank of America offers great rates for those looking to refinance their auto loan. They also have a range of tools and calculators to help you determine the best loan option for you, and their application process is straightforward and hassle-free.

5. LightStream

LightStream, a division of SunTrust Bank, stands out for its same-day funding and guarantee of being the best option for those with good credit. They offer competitive rates for new loans and auto loan refinancing, but their qualification process can be more stringent than other options on this list.

While there are many auto finance companies to choose from, these five companies stand out for their competitive rates, flexible payment options, and hassle-free application processes. By exploring these options, you’re sure to find the perfect auto financing to fit your individual needs and budget.

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Last Verified:
Aug 3, 2023