What to Expect When Financing a Vehicle

Few things are as exciting as getting ready to drive home in your new vehicle. However, when it comes to financing, sometimes the process can feel a bit cumbersome. There's no reason it should distract from your overall enjoyment, though.

Here at Honda of the Avenues, your enjoyment comes first. That's why we created a list of things you can expect when buying your car and choosing to finance. Keep reading to prepare yourself for this important step.

What to do beforehand.

One of the first things you should do before financing your vehicle is find out the status of your credit score. The better your credit score, the higher chance you have of qualifying for a lower interest rate.

You'll want to figure out what sort of interest rates to aim for. Being informed on interest rates that other institutions can provide you will help with the negotiation process. Getting pre-approved can also help you save time during the purchasing process.

It's also important that you find out what you can afford. Try to do this with your credit score in mind so that you can stay within your preferred budget.

What you need to bring with you.

There are four primary documents you need to bring with you when purchasing a vehicle.

1. Proof of income Be sure to bring copies of your pay stubs from last month as well as what you've been paid to-date the past year.

2. Credit and banking history This includes any information about other outstanding loans or financial obligations you may have, as well as how you've fared in the past financially. These could range from mortgage or lease agreements to alimony or child support payments to credit card statements or bank statements.

3. Proof of residence Personalized mail or your mortgage statement are usually enough to provide reasonable proof of residence.

4. Proof of insurance Your lender will require proof that your insurance company is aware of your newly purchased vehicle and that it's properly insured.

If you aren't financing with the dealership, you will also want to bring along proof of your loan.

Know what determines the loan terms.

Most auto loans last around three to five years. Your lender will run a credit check and ask you income-based questions. Your interest rate will be determined based on how secure the lender perceives your finances to be. If you have a better credit score, manageable debt, a good standing with your insurer and a high income, you'll likely qualify for a lower interest rate. If not, you can plan what your monthly payments will be with a higher interest rate and try to make it as manageable as possible.

If you’d like to purchase a vehicle or want to know more about how to finance in Jacksonville, FL, drop by Honda of the Avenues at 11333 Philips Hwy, Jacksonville, FL 32256 for a test-drive. We look forward to serving our customers from Serving St. Augustine, Northeast Florida and the First Coast.