How to Finance a Car


If you’re in Bedford, Manchester, or Merrimack and you’re unfamiliar with how to finance a car, our team here at Ira Lexus of Manchester has provided you with a quick introduction to a few of the basic aspects of this vital process. Our hope is that once you’ve read through this information, you’ll have a better understanding of what it’s all about.

Feel free to send an email, give us a call, or visit us in person in the event that you have any questions that you would like to have answered. Read on to get started.

Auto Financing

Important Finance Terminology

There are a few terms that you’re going to need to be familiar with from the beginning. Here are the big ones to keep in mind:

  • Car Loan. The car loan is simply the name for the agreement that you have with the lender that states that you’ll pay back the agreed-upon amount of money over a specified period of time.
  • Down Payment. This is what you pay when you initially get your car loan. When you finance a car, the amount of money that you pay throughout the duration of your loan is the difference between the down payment and the vehicle’s full price.
  • Interest. The interest is the cost that the lender charges for providing you with the money to purchase the vehicle.

Down Payment

The Importance of a Down Payment

Paying as much money as you can up front is important because it can help you get a better deal on your loan. For the most part, a larger down payment means that your loan payment will be smaller and the term of the loan will be shorter.

Remember to Watch Your Credit Score

Having a good credit score is important because it’ll help you get a lower interest rate. It’s for this reason that it’s important that you continue to work toward maintaining it.

Car Loan

Applying for a Car Loan

It’s a good idea to apply for financing with a few different lenders in order to find the best deal. Doing this will give you a good feel for what’s out there as well as what you’ll be able to afford according to your current financial situation.

Remember that applying for several loans over an extended period of time can end up hurting your credit score. A good way to avoid this would be to fill out a few loan applications over a period of a couple of days or weeks instead of doing it over a period of several months. This won’t make it look like you’re applying for a lot of loans.    

Let’s Get Started

If you have questions about any aspects of the above information, we’ll be happy to answer them for you. Bedford, Manchester, and Merrimack drivers interested in beginning the car-buying and -financing process are welcome to contact us here at Ira Lexus of Manchester. We’ll be able to get you scheduled for your test drive today.


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Ira Lexus of Manchester 42.955522, -71.481662.