Auto financing can be a scary step for most people but being prepared can help lessen that fear. Before you enter into a auto loan, become familiar with all the different options. Whether you finance a new or used car, you lease or buy….be prepared.

If you will be using more than 60% of your monthly income on the vehicle, bills and living expenses, most lender will deny the request to finance a car. Save some money for a down payment. That might ease the lenders because they see you are willing to put your own money out there.

Being that a vehicle’s price is typically over $20,000, buying a vehicle is a major financial decision. So whether you decide to lease or buy the vehicle, you are not the only person facing this decision.

About 25% of car buyers do not qualify for standard auto financing options. If you have bad credit or no credit, see the dealership and find out your alternative options; never be afraid to ask.

When applying for an auto loan it is important that you find out the Annual Percentage Rate (APR) that the lender is offering. This determines how much interest you will pay in addition to what you owe for the loan. A lower APR means a you will have lower payments.

It does matter to the lender what type of car you want. Never find a car outside your price range. Do not forget to include car insurance when budgeting. This will show you what you have left of monthly income.

An auto refinance is a process of finding a new lien holder (lender) to replace your current loan. People do this to obtain a better rate, skip a few payments, add or remove a co-applicant, extend their term, and add products (such as GAP insurance) to a loan.

Out of all new car buys, 70% are financed. Unless you have the money to buy the vehicle in full, then the only other option is to finance.

Before you sign on that dotted line, you should be fully informed about the ins and outs of car financing. It does not matter whether you are buying or leasing the vehicle.