How Auto Financing Works: A Plain-Language Guide

The short answer: when you finance a vehicle, a lender pays the seller and you repay the loan over a set term with interest. Your credit, the amount you borrow, the term and any down payment determine your rate and monthly payment. Approval and terms are never guaranteed and depend on the lender.

The Key Terms

Term	What it means
APR	The yearly cost of borrowing, including interest and certain fees, shown as a percentage
Term	How many months you will repay the loan
Down payment	Money you pay up front, which reduces the amount you borrow
Principal	The amount you borrow
Trade equity	The value of your trade-in minus what you still owe on it

What Affects Your Rate and Payment

Credit history, income and debt, the vehicle you choose, the term, the down payment and the lender's own guidelines all matter. A longer term lowers the monthly payment but usually means paying more interest in total. Compare the total cost, not only the payment.

Pre-Qualify Before You Shop

Pre-qualification gives you a realistic idea of what you may be able to finance before you commit to a specific vehicle. Dial offers a pre-qualify-then-shop option and a full finance application. Pre-qualification is not a guarantee of approval; final terms depend on lender review.

What to Have Ready

Proof of identity and income, proof of residence, insurance information and, if you are trading in, your current loan details. Requirements vary by lender.

Next Steps

Estimate your trade with the trade value tool, compare leasing and buying, then choose a Dial location for your finance application.

Keep Researching

Shop at the Right Dial Location

Dial Auto Group has five Chicago dealerships. Each brand is sold at specific stores, so start with the store that carries the vehicle you want.

Dealership	Brands	Address	Shop
Dial Chevy of Chicago	Chevrolet	6603 S Western Ave, Chicago, IL 60636	New \| Used
Dial Nissan of Chicago	Nissan	7410 S Western Ave, Chicago, IL 60636	New \| Used
INFINITI of Chicago	INFINITI	2711 S State St, Chicago, IL 60616	New \| Used
Dial Chrysler Dodge Jeep Ram of Chicago	Chrysler, Dodge, Jeep, Ram	7340 S Western Ave, Chicago, IL 60636	New \| Used
Jeep of Chicago	Jeep	5950 N Western Ave, Chicago, IL 60659	New \| Used

See all Dial Auto Group locations or search new and used inventory across the group.

Last reviewed October 2026 by Dial Auto Group. This guide is general information, not financial or legal advice. Vehicle features, availability and pricing vary by model and dealership; confirm details with the store.