What to Expect When Financing a Vehicle in Lansing, MI

If you’re in the process of buying a vehicle, it’s easy to get excited about it. However, many people (especially first-time buyers) might be a bit apprehensive about the financing process that comes along with buying a new car. Here at Spartan Toyota, we want our customers to be as informed as possible when it comes to financing a vehicle. That’s why we made a list of what buyers should expect when financing a vehicle. Keep reading to learn more.

What to do beforehand.

One of the initial 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 should also research what sort of interest rates to zero in on. Being informed on interest rates that other institutions can offer you will help with the negotiation process. Getting pre-approved can also help you save time during this process.

Additionally, it's important for you to know what you can afford. Keep 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 incomeBe 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 historyThis 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 be mortgage or lease agreements, alimony or child support payments, credit card statements or bank statements.

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

4. Proof of insuranceYour 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.

A typical auto loan lasts for three to five years. Your lender will run a credit check and ask you income-based questions. Then your interest rate will be determined based on how secure the lender perceives your finances to be. If you have a decent 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 Lansing, MI, drop by 5701 S. Pennsylvania Ave. Lansing, MI 48911. We look forward to serving customers from Williamston and DeWitt.