Are you interested to learn about the steps in involved in a typical car finance application? At Fido Finance, our team often gets asked ‘how does financing a car work?’ and while the process can be overwhelming and confusing, especially for those who have never financed a car before, it doesn’t need to be with Fido by your side. We help simplify the car financing process and secure you the loan you need, at the best possible rates, in the fastest possible time.
If you’d like to learn more about how to get a car loan or how you get started, try out our Obligation Free Car Finance Pre-Approval form or call us on 13 FIDO and see how the Fido finance brokers can help you apply for your best rate today!
How Does Financing a Car Work – The Key Steps in the Process
Step 1: Plan out your budget
When it comes to the process of ‘how to finance a car’, it’s important to first take a step back and determine what you’ll be able to afford. This will help you narrow down your choices and prevent you from overspending. Your budget should include the purchase price of the car, as well as the cost of interest, taxes, insurance, and maintenance.
Step 2: Apply for your pre-approval
There’s nothing worse than finding the perfect car only be let down if your finance doesn’t come through. With pre-approval, this will give you an idea of how much you can afford to spend on a car, further helping you narrow down your choices. Pre-approval also shows the dealer that you’re a serious buyer and can help you negotiate a better price. At Fido Finance, we’re committed to finding you the right type of finance for your vehicle and can help you get pre-approval from a range of lenders giving you the flexibility of choice to choose finance that works for you.
Step 3: Shop around for the best deal
Once you’ve determined your budget and have been pre-approved for a loan, the next step in how to get a car loan, comes down to shopping around for the best deal. You should visit different dealerships and compare prices, features, and the options of the cars you’re interested in. It’s also a good idea to check out online car-buying platforms and private sellers to see if you can find a better deal.
Step 4: Read and understand the contract
Once you’ve found a car you’re interested in and have negotiated a price, it’s time to sign your contract. Before you sign, it’s important to read and understand the contract. This will ensure that you know what you’re agreeing to and that there are no hidden fees or charges down the line. Our team are here to guide you through every step and will help you review the interest rate, the length of the loan, and the monthly payments to ensure it’s the right fit for you.
Step 5: Find car insurance that works for you
Depending on the type of finance you’ve chosen, you may be required to have suitable car insurance before driving away in your new car. You should research and compare different insurance options to find the one that best suits your needs. Some of the factors you should consider when choosing a car insurance policy include the level of coverage, the price of the policy, and the reputation of the insurance company.
Step 6: Finalise the deal
Once you’ve reviewed the contract, signed it, and have your car insurance, you’re ready to finalise the deal and drive your new car home. It’s important to keep all of the paperwork associated with the purchase of your car, including the contract, the registration, and the insurance, in a safe place, this will not only aid as a bit of a refresher when it comes ‘how does financing a car work’ if you want to review the process down the line but keeping these documents in safe place will make it much easier to find them if you ever need them.
