Financing Frequently Asked Questions...(FAQ's)

Understanding Vehicle Financing

Most consumers need financing or other options in order to acquire a vehicle. In some cases, buyers use Direct Lending: they obtain a loan directly from a finance company, bank, or credit union. In direct lending the buyer agrees to pay the amount they have financed, plus an agreed-upon finance charge, over a certain period of time.

The most common type of vehicle financing is Dealership Financing. This is when the financing arrangments are made at the dealership usually through the F&I department. This arrangement, like direct lending, is also set up to where the buyer agrees to pay the amount financed, plus an agreed-upon finance charge, over a period of time. Financing through European Motorcars will not only be convenient, but you can also benefit from the relationships we have built with many different banks and lenders over the past thirty years. We have a wide range of finance options and occasionally offer low-rate manufacturer-competitive programs for buyers.
 

What happens when you apply for financing at European Motorcars?

The first step to apply for financing would be for you to fill out a credit application. You can fill out a credit application in person at our dealership, or on our website from the comfort of your own home (WWW.EUROPEAN-MOTORCARS.COM). The credit application will require information such as: your name, Social Security number, date of birth, current and previous addresses, current and previous employment, any other sources of income, and other required information. Once you have filled out the credit application, we can then obtain a copy of your credit report, which contains information about current and past credit obligations, your payment record, and any data from public records. Depending on the status of your credit report, we will then submit your application to the appropriate assignees in order to obtain the best possible financing arrangement for the buyers benefit. These finance companies, or other potential assignees, will usually evaluate your credit application using automated techniques such as credit scoring, where a variety of factors, such as credit history, length of employment, income, and expenses may be weighed and scored. Since the lender, or assignee, does not deal directly with the prospective vehicle purchaser, it bases its evaluation upon what appears on the individual's credit report and score, the completed credit application, and the terms of the sale, such as the amount of the down payment. The finance company, or assignee, then decides if they would like to offer the loan, and at what annual percentage rate (APR) they are willing to finance at.

WHAT INFLUENCES YOUR APR?

There are a few factors that are considered when establishing an annual percentage rate. These factors can be (but are not limited to): your credit history, current finance rates, competition, market conditions, and special offers.

WHAT ABOUT A CO-SIGNER?

You may be allowed by the creditor to have a co-signer sign the finance contract with you in order to make up for any deficiencies in your credit history. A co-signer assumes equal responsibility for the contract; and the account history will be reflected on the co-signer's credit history as well.

DO I NEED A DOWN PAYMENT?

If you have good credit you may be able to get auto financing with little or no money down. If, however, you've had some credit problems, you'll most likely be required to have some type of down payment.

WHAT IF I HAVE A LOW OR NO CREDIT SCORE?

We understand, hardly anyone has perfect credit. We work with many different banks and lenders that we have built relationships with over the years in order to get you the financing you need. There are many options available for low credit scores and even no credit at all.

HOW FAST CAN I GET MY CAR?

Most auto finance companies are able to process a car loan application instantly, or minimally within 24 hours. Be prepared to provide any needed documentation such as proof on income, car insurance, or other stipulations required by the potential lender. In most cases, our customers are able to drive home in their new vehicle the same day they apply for the loan.

IS THE INFORMATION I PROVIDE PRIVATE AND SECURE?

Absolutely. Any information you provide to us is covered under our "Privacy Policy". You can read the full version of this on our website (WWW.EUROPEAN-MOTORCARS.COM) or you may also request a copy of it in person at our dealership.

DOES APPLYING TO MULTIPLE LENDERS FOR AN AUTO LOAN HAVE A NEGATIVE EFFECT ON MY CREDIT SCORE?

No. At the present time, the credit scoring agencies say that all credit inquiries within a 14 day period associated with one type of buying are consolidated into one inquiry for scoring purposes. In so many words, they basically understand the need to shop around and will not penalize you for that (during the 14 day period of course).

After Completing a Vehicle Purchase:

Be aware that if you financed the vehicle, the assignee (bank, finance company, or credit union, etc.) holds a lien on the vehicle's title (and in some cases the actual title) until you have paid the contract in full. Make your payments on time. Late or missed payments incur late fees, appear on your credit report and impact your ability to get credit in the future.

Truth in Lending Act:

Requires that, before you sign the agreement, creditors give you written disclosure of important terms of the credit agreement such as APR, total finance charges, monthly payment amount, payment due dates, total amount being financed, length of the credit agreement, and any charges for late payment.

Equal Credit Opportunity Act:

Prohibits discrimination related to credit because of your gender, race, color, marital status, religion, national origin, or age. It also prohibits discrimination related to credit based on the fact that you are receiving public assistance or that you have exercised your rights under the federal Consumer Credit Protection Act.
 

GLOSSARY

Amount Financed: The dollar amount of the credit, or loan, that is provided to you.

Annual Percentage Rate or "APR": The cost of credit for one year expressed as a percentage.

Assignee: The bank, finance company, or credit union that provides the credit or loan.

Credit Insurance: Optional insurance that pays the scheduled unpaid balance if you die, or scheduled monthly payments if you become disabled. As with most contract terms, the cost of optional credit insurance must be disclosed in writing, and if you want it, you must agree to it and sign for it.

Down Payment: An initial amount paid to reduce the amount financed.

Extended Service Contract: Optional protection on specified mechanical and electrical components of the vehicle, available for purchase to supplement the warranty coverage provided with the new or used vehicle.

Finance Charge: The total dollar amount you pay to use credit.

Fixed Rate Financing: The finance rate remains the same over the life of the contract.

Guaranteed Auto Protection (GAP): Optional protection that pays the difference between the amount you owe on your vehicle and the amount you receive from your insurance company if the vehicle is stolen or destroyed before you have satisfied your credit obligation.

Monthly Payment Amount: The dollar amount due each month to repay the credit agreement.

Variable Rate Financing: The finance rate varies and the amount you must pay changes over the life of the contract.

 

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