Buying a car is a big decision, so it’s understandable if you’ve got some questions about the financing process. We’ve put together this list of frequently asked questions about auto loan financing to help you. But please don’t hesitate to call us with any additional questions or for clarification. Our Financing Department at Penske Buick GMC of Cerritos is here to help you.
How is your credit score determined and what will your credit score mean for your car loan?
Credit reporting agencies like Equifax, TransUnion and Experian assign you a credit score to help banks determine how risky it is to give you a loan. So they look at things like how well you make payments on time, the length of you credit history (or how long you’ve held credit with something like a credit card or another loan). They also look at how much debt you have and what kind it is. Debt is part of growing your credit score but if you have too much, your credit score could go down. There are many ways to check your own credit score if you’re not sure what it is. Scores typically range from 350-850. The higher your score, the better your credit. If you have a lower score, you could still qualify for a loan but you may not get the best rates.
How do financial institutions determine if you qualify for an auto loan?When you apply for a car loan, banks and credit unions will look at things like the vehicle you chose. How much does it cost, how old is it and how many miles are on the vehicle. They’ll also look at factors like your income, how long you’ve been with your employer and your credit score.
What if you have less than perfect credit or don’t meet every factor the banks look at?You may still qualify. The reason financial institutions look at so many different factors is to assess whether or not you can afford the loan you’re applying for. Just because you may have a weaker credit score or short job history or something else like that won’t immediately disqualify you if you’re strong in other areas. Find out if you pre-qualify for a loan here.
How is your monthly payment determined? Your monthly payment will be larger or smaller depending on how much money you put down, how long the loan term is and what the interest rate is. You can use our payment calculator to get an estimate.
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