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How do I qualify for a car loan?

Answered by Jim Manelis, car enthusiast and Chase Auto Executive.

You've found your dream car and can't wait to get behind the wheel. Now, you have to figure out how to pay for it. Most car shoppers need to finance the purchase. That's when you borrow money from a dealership or a lender and pay them back over time, usually with interest, to purchase a new or used vehicle.

How to accelerate the financing process:

  • Proof of identity: A photo ID with your signature on it. Government identification or a passport are typically acceptable documents. Check with your lender or dealership to see which they prefer.
  • Proof of insurance: Dealers may ask you for proof of insurance before you purchase and take out a loan on your new or used vehicle. You can contact insurance companies from the dealership when you buy your car, or get details lined up with the insurance provider before purchasing the vehicle.
  • In some cases, you'll need proof of residence: A driver's license is typically acceptable.
  • If you're trading in another vehicle as part of your financing, you should probably have your registration papers for your current vehicle.
  • In some cases you'll need to prove that you have a steady source of income, usually through several months of pay stubs or W-2 forms. Some lenders may also call your employer for verification.

Tips for getting the best financing

  • Know your credit score – this plays a key role in the interest rate you'll pay for your loan. A high credit score can help you get a low interest rate on your loan and save you money.
  • Pick your payment – how much can you realistically afford to spend each month without straining your budget?
    • It's important to remember that your monthly costs will include more than the car payment you make to your lender. Calculate your total “Cost to Own” using pencil and paper or one of the many online calculators available. Your total “Cost to Own” should include your car payment, insurance, maintenance and gas. You should also factor in yearly registration renewal and miscellaneous items.
  • See if you can make a down payment – this may help you qualify for a loan and may get you lower interest rates and monthly payments. Even if the dealer provides “no-down-payment” offers, if you have the funds you can't go wrong with a down payment.
  • Research your lender – if you're buying a used car, there may be restrictions on used car loans, including limits on the age of the vehicle and/or the mileage. Check with your dealership or lender for more information.

Show up with financing

Financing is negotiable and can be confusing, so consider going with a pre-approved offer, like one through Chase Auto. With Chase Auto you can apply for financing and arrive at the dealership knowing exactly how much you can spend. A pre-approval is usually good for a specific amount of time for a certain amount of money.

Incentives and rebates

Special financing deals may also be available from auto makers, including incentives and rebates. Do your research and see what's available for the make and model of the vehicle you've chosen.

Now that you understand the basics of financing a car, you'll feel confident and ready to get the best deal for your budget. Drive on!

Shop online inventory

You can shop online for a car you'll love from the comfort of your home.

Apply for financing

Start your application online. Credit decisions and APRs are valid for 30 days.

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