Auto Financing 101: Everything You Need to Know About Financing a Car

July 15th, 2023 by

In the market for a car loan? You’ve come to the right place. Car financing can be frustrating and confusing but at Patrick MINI we want to set you up for success with your vehicle purchase. Whether you’re interested in a new or a used car, a lease or a loan, our team wants to provide you with answers to any questions you might have.

We’ve put together some of the most frequently asked questions about car financing to help you get on the road quicker.

Dealer Financing vs Bank Financing

Financing through a dealership makes it more convenient since the whole process is done in one sitting which is why many drivers choose the dealership to finance through. Dealerships also have a network of lenders that they work with which allows for options on competitive rates within the industry.

If you finance through a bank, you must make an extra trip to the bank, allow time to process and might not be given as many options since there is a limited number of lenders. With a busy schedule, the last thing you would want to do is make an extra stop.

Financing through a dealership is quick, easy, and hassle-free.

What are Factors to Consider Before Getting a Loan?

As mentioned above, your lender will be the most important factor but another thing to consider is your credit score. This will impact your auto loan. Improving your credit score before purchasing a vehicle will make a big difference. The better the credit score the better the rate, which in turn, gets you into a better car.

Other factors you might want to take into consideration is your budget and whether you want to buy a new MINI or used MINI.

Should I Finance or Lease?

This is a question that every driver asks themselves before getting into a new car. Some prefer to lease while others think it’s better to finance. It all depends on your long-term objectives for the vehicle. If you like to drive a new car every couple of years, leasing might be for you. But if you like the idea of paying off your MINI and calling it yours, then buying is the best route for you.

To learn more about which option is better for you, check out our blog on the difference between the financing and leasing

What is the 20/4/10 Rule?

One way to ensure you’re making a good financial decision when buying a car is to use the 20/4/10 rule. By following these requirements, you’ll be able to finance a vehicle properly without the potential of negatively impacting your credit.

  • You can make a down payment of 20% or more when purchasing the car
  • You can take out a car loan with a term of four years or less
  • You can have your total costs associated with your car be less than 10% of your monthly income

If you’re ready to apply for an auto loan or lease from Patrick MINI, contact our Finance Center online or by phone.  Alternatively, you can always drop by 700 E Golf Rd Schaumburg, Illinois during our regular business hours. If you don’t have time to drop by our dealership, no problem! You can conveniently start the application process from the comfort of your home thanks to our online form. Make your dream of owning a MINI a reality, apply for financing with us today!

Posted in Car Buying, Leasing, Sales