Finance Department

WHAT IS FINANCING?

If Financing Feels Daunting, Our Financing Department Wants to Make it Easier

So, you’ve done your research, read your guides, and found that new Chevy Camaro, Tahoe, Cruze, Equinox, Malibu, or Traverse in Barron. Now comes the financing portion, but you’ve got a few questions first. Good! Auto financing isn’t something you want to rush into, so take a moment to read our Auto Financing guide, and if you have any questions, give our financing experts a call at (888) 509-6552.

What is Financing? What is an Auto Loan?

Financing something simply refers to borrowing money from a lender for a fee—the interest you pay back—in order to pay for the vehicle. When you finance a vehicle, this method is most often called an auto loan. There are two types of lending: direct lending and dealership financing.

Direct Lending: This is where you get a loan straight from the bank, a financing company, or a credit union. This includes the amount financed and an agreed-upon interest rate. You secure this ahead of coming into the dealership separate from us. Once you find a vehicle you like, you pay for it using the loan.

Dealership Financing: This method can be a little more convenient, especially if you’re looking for special programs, special deals, or offers from the manufacturer. This also allows you to peruse multiple financing options thanks to our financing department’s relationship with banks and GM financing.

HOW DOES FINANCING WITH A LOAN DIFFER FROM LEASING?

There are a number of big differences between financing with an auto loan and taking the wheel with a lease, but there are plenty of small deviations, too:

• When you finance, your payments start to build equity, but that’s not the case with lease payments!
• With financing, you’re paying toward ownership, but with a lease, you’re paying to possess the vehicle for a given amount of time.
• Because financing equals ownership, you can customize your financed vehicle to your heart’s content, but if you’ve leased your vehicle, you can’t customize or personalize it.
• In fact, leases come with all kinds of stipulations like mileage limits and maintenance schedules you have to adhere to, but that’s not the case with a financed vehicle.
• With a leased vehicle, more often than not, the vehicle will remain under manufacturer’s warranty, so most repair work ends up covered, but with a financed vehicle, because you own the vehicle beyond the bounds of its warranty, after that warranty expires, the cost of repair falls entirely to you.