Complete Guide to Car Financing in High Point
Car financing gets easier to understand when you know what actually affects the numbers. Vehicle price, APR, loan term, down payment, trade equity and the amount financed all work together.
How Does Car Financing Work?
Vehicle financing allows you to borrow money toward the purchase of a vehicle and repay that amount over an agreed period of time.
A financed transaction can include several different pieces, and understanding how they fit together can help you compare your options more clearly.
The agreed purchase price helps determine how much may need to be financed.
Money paid upfront can reduce the amount financed.
Positive equity in a trade can reduce the amount that needs to be financed.
The amount borrowed after the applicable parts of the transaction are calculated.
The annual percentage rate reflects the annualized cost associated with borrowing.
The number of months over which the loan is scheduled to be repaid.
What Determines Your Monthly Vehicle Payment?
A monthly payment is the result of several parts of the transaction working together. Vehicle price by itself does not determine the final payment.
A higher purchase price generally means more money may need to be financed.
Money paid upfront can reduce the principal amount financed.
Positive equity can lower the amount financed. Negative equity affects the transaction differently.
The cost of borrowing affects both the monthly payment and total financing cost.
The number of months used to repay the loan directly affects the payment.
Applicable taxes, registration and other required costs can affect the final amount financed.
Do not judge a vehicle financing arrangement only by the monthly payment. Compare the vehicle price, APR, loan term and total amount financed together.
What Is APR?
APR stands for annual percentage rate and reflects the annualized cost associated with borrowing money.
The APR available on a vehicle loan can depend on the financing source, application, credit history, vehicle, amount financed, loan term and other underwriting factors.
Two financing arrangements with similar monthly payments can have different APRs, terms and total costs, so it is worth looking beyond the payment alone.
How Does the Loan Term Affect Financing?
The loan term is the number of months used to repay the vehicle loan.
A shorter term may result in a higher monthly payment but can reduce the total amount of interest paid over time.
A longer term may lower the monthly payment but can increase the total financing cost over the life of the loan.
The best term is not automatically the shortest or the longest. It needs to make sense for the vehicle, financing structure and your overall budget.
How Do Down Payments Work?
A down payment is money paid toward the transaction at the time of purchase. It reduces the amount that may need to be financed.
There is no single down-payment amount that applies to every buyer. The amount needed depends on the application, vehicle and financing source.
Do You Always Need Money Down?
No. Some transactions may require money down while others can be structured differently.
Start With Pre-ApprovalHow Does a Trade-In Affect Financing?
A trade-in can play an important role in the financing structure, even if you still owe money on the vehicle.
If the vehicle is worth more than the verified payoff, the difference may help reduce the amount financed.
If the verified payoff is greater than the trade value, the difference must be addressed as part of the overall transaction.
Peters Auto Mall can verify the lender payoff and account for it as part of the transaction.
If you simply want to sell your vehicle, Peters Auto Mall can evaluate it without requiring you to purchase another vehicle.
What May a Financing Source Look At?
There is no single factor that determines every financing decision. Different financing sources can have different programs and guidelines.
Current income and employment information can be part of determining whether the proposed payment fits the application.
Past payment history and existing accounts may be part of the overall review.
Current monthly obligations can affect the financing picture.
Previous auto-financing history may be one factor, but first-time buyers can still have financing options.
Vehicle year, mileage, price and type can affect available financing programs.
The requested loan amount is part of the overall transaction.
Money down can affect the structure of the financing arrangement.
Positive or negative equity can affect the final amount financed.
What Is Debt-to-Income Ratio?
Debt-to-income ratio, often called DTI, compares monthly debt obligations with income.
A financing source may use DTI as one part of evaluating whether a proposed vehicle payment fits with the applicant's existing obligations.
DTI is only one factor and does not by itself determine the outcome of a financing application.
What Information or Documents Might You Need?
The exact requirements depend on the financing source and transaction, but you may be asked for information involving:
A driver's license or acceptable state-issued identification may be used depending on the transaction.
Pay stubs, bank statements or other acceptable documentation may be requested.
Current address and proof of residence may be part of the financing process.
Current employment information may be requested.
Appropriate vehicle insurance is generally needed before delivery.
Title, registration, payoff information or other documentation may be needed when trading a vehicle.
Pre-Approval or Full Credit Application?
You can start the financing process two different ways depending on how far along you are.
Pre-approval is an easy first step when you want to begin exploring the financing side before completing the full process.
The full credit application is the next step when you are ready to provide the complete information needed for a financing review.
Start With Pre-Approval Complete Credit ApplicationFirst-Time Buyer?
If you have never financed a vehicle before, or simply have little established auto-credit history, that is different from rebuilding after previous credit problems.
First-Time Buyer HelpCredit Problems in the Past?
Repossession, bankruptcy, collections, charge-offs, student-loan problems and other past credit issues do not mean you should stop exploring your options.
Peters Auto Mall works with multiple financing sources and also offers Buy Here Pay Here options.
Financing With Credit ChallengesShop While You Explore Financing
You can begin with financing first or start by comparing vehicles. The important part is finding a vehicle and financing arrangement that make sense together.
Not Sure Where to Start?
You do not have to understand every financing term before contacting us.
If you have a question about payments, APR, money down, trade equity, credit, a vehicle or which application to use, call our team and tell us what you are trying to figure out.
Call Peters Auto Mall - 336-781-2892Why Peters Auto Mall?
Peters Auto Mall has served High Point and the surrounding Triad since 1993. We offer multiple financing sources, Buy Here Pay Here options, first-time buyer assistance, trade-ins, frequently changing used inventory and a $0 dealer doc fee.
Peters Auto Mall does not charge a dealer documentation fee.
We work with multiple outside financing sources rather than limiting every customer to one option.
Peters Auto Mall also offers Buy Here Pay Here options.
Little or no established auto-loan history does not mean you should assume you have no options.
Your current vehicle can be evaluated whether it is paid off or still has an existing payoff.
Shop Peters Auto Mall at two convenient locations in High Point.
Car Financing Questions
There is no single minimum credit score that applies to every financing source. Different programs can look at different parts of the application.
No. There is not one down-payment requirement that applies to every buyer or every transaction.
Yes. You can start the process with little or no established auto-credit history. Peters Auto Mall works with first-time buyers.
Yes. Peters Auto Mall can evaluate the vehicle, verify the payoff and account for both as part of the transaction.
A state-issued ID may be accepted in some situations. Documentation requirements depend on the individual transaction and financing source.
Yes. Peters Auto Mall works with customers who use an ITIN. Documentation and financing requirements depend on the individual transaction.
No. Peters Auto Mall charges a $0 dealer doc fee.
Yes. Buy Here Pay Here is one of the financing paths available at Peters Auto Mall.
Car Financing Help in High Point
Start online or call our team before visiting either Peters Auto Mall location. Inventory may be located at either store, so call about a specific vehicle before visiting.