If you’re buying your first car and planning to finance it, you’re not alone, most buyers do. But if terms like APR, down payment, and loan term sound overwhelming, don’t worry. Car financing isn’t as complicated as it seems, and with a little guidance, you can make a confident, well-informed decision.

At Hubert Vester Auto Group in Wilson, NC, we help new buyers every day, many of whom are applying for financing for the first time. This guide will walk you through the basics, explain how to improve your chances of approval, and help you understand your options.

How Car Financing Works

Car financing means you’re borrowing money to buy a vehicle and paying it back over time with interest. Instead of paying the full price upfront, you spread the cost out into manageable monthly payments.

Key Terms to Know:

• Loan Amount: The amount you borrow (usually the price of the car minus your down payment or trade-in).
• APR (Annual Percentage Rate): The interest rate charged on your loan. Lower is better.
• Loan Term: How long you’ll repay the loan — typically 36 to 72 months.
• Down Payment: The amount you pay upfront to reduce your loan amount.
• Monthly Payment: What you’ll owe each month, based on the loan amount, term, and APR.

Tip: The more you put down and the shorter the loan term, the less you’ll pay in interest overall.

Tips to Get Approved for Your First Loan

• Make a larger down payment: It shows lenders you’re financially responsible and lowers the amount you need to borrow.
• Bring proof of steady income: Pay stubs, bank statements, or employment letters can show you can afford payments.
• Get pre-approved: Understand what loan amount and rate you qualify for before shopping.
• Consider a co-signer: Having someone with strong credit co-sign can help you qualify and get better rates.

Dealerships often work with a wide network of lenders, including those that specialize in first-time buyer programs.

Why Credit Score Matters (And How to Improve It)

Why it Matters:

• Higher scores usually mean lower interest rates.
• A low score can lead to higher payments or loan denial.
• Lenders use scores to assess risk and reliability.

How to Improve It:

• Pay bills on time, even utility or phone bills count.
• Keep credit card balances low.
• Avoid opening new credit lines just before applying.
• Check your credit report for errors and dispute them if needed.

Financing Through a Dealership vs. a Bank

At Hubert Vester Auto Group, we partner with both local and national lenders to help buyers of all credit backgrounds secure financing that works for them, all in one place.

Final Thoughts: Financing Doesn’t Have to Be Complicated

Car financing can seem intimidating at first, but with the right approach, it’s completely manageable, even if it’s your first time. Start by understanding your budget, improving your credit where you can, and working with a dealership that supports you at every step.

At Hubert Vester Auto Group, our finance specialists will explain your options clearly, walk you through the approval process, and help you find a vehicle and payment plan that fits your life.

Ready to finance your next car with confidence? Visit hv.auto or call us at (252) 677-5175 to speak with a financing expert today.

People Also Ask

• Can I finance a car with no credit?
  Yes, many dealerships offer first-time buyer programs and work with lenders that help buyers with limited or no credit history.
• How much should I put down on a car?
  A down payment of 10%–20% is recommended, but the more you can afford upfront, the better your loan terms may be.
• What is a good interest rate for a car loan?
  Rates vary based on credit, but anything under 6% is generally considered good for a new car loan in 2024.
• Should I get pre-approved before going to the dealership?
  Yes, pre-approval can help you understand your budget and may give you leverage when negotiating at the dealership.