How Does Car Financing Work?

If it’s time for your next car in San Marcos, you have the option to purchase your used or new car outright, you can apply for financing and get a loan to purchase your vehicle, or you can lease your vehicle. What is financing a car exactly? What does it mean to finance a car? BMW of Escondido has the answers for you below.

How Does Financing a Car Work?

Once you get started, it’s easy to understand how car finance works. Financing means that you apply for the loan through the dealership, a bank, or a credit union in order to take the car home, and you pay back the loan with monthly payments over time. You can even start the process by filling out a loan application online, or you can apply for a loan right at the dealership. Some factors that will affect what type of financing loan you are able to get include:

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

If you have a low credit score or bad credit history, or if you don’t have enough credit built up yet, one option to get a better finance rate is to ask a family member or someone else that’s close to you to cosign the loan.

Choosing Your Lender

If you qualify for an auto loan, chances are you will have a few options when it comes to choosing your lender. Many dealerships offer in-house financing, so you can shop around and compare the dealer’s offer to a bank or credit union’s to find the loan that works best for you.

Steps to help determine what loan will work for you:

  • How much money can you set aside for the down payment at the time of purchase?
  • How much can you set aside each month for your monthly payments on the loan?

Finalizing the Auto Loan Terms

Before you sign on the dotted line, make sure you are getting the best deal you can. If you have decent credit there might be wiggle room for negotiating on the loan terms and interest rate. Once you are satisfied, you can finalize the loan terms, sign all the necessary paperwork, take delivery of the vehicle, and drive home to the San Diego area in your new vehicle.

Get More Car Buying Tips in Escondido?

To learn more about the automotive finance process, contact us online or simply stop by our dealership to speak to a member of our finance department near Poway. You can also rely on our car buying tips so you can be better prepared for your next car purchase!

"WARNING*: Operating, servicing and maintaining a passenger vehicle or off-road vehicle can expose you to chemicals including engine exhaust, carbon monoxide, phthalates, and lead, which are known to the State of California to cause cancer and birth defects or other reproductive harm. To minimize exposure, avoid breathing exhaust, do not idle the engine except as necessary, service your vehicle in a well-ventilated area and wear gloves or wash your hands frequently when servicing your vehicle. For more information go to
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1557 Auto Park Way • Escondido, CA 92029

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BMW of Escondido

1557 Auto Park Way Escondido, CA

Phone: (760) 745-3000


Phone: (800) 544-4269

1557 Auto Park Way Escondido, CA


Phone: (760) 745-3000

1557 Auto Park Way Escondido, CA


Phone: (760) 291-2894

1557 Auto Park Way Escondido, CA

Collision Center

Phone: (760) 739-1029

1557 Auto Park Way Escondido, CA
33.1162419 -117.109332
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BMW of Escondido
BMW of Escondido
1557 Auto Park Way
Escondido, CA, 92029 US
(760) 745-3000
BMW of Escondido 33.1162419, -117.109332.