Buying your next car is exciting. You may feel like a kid in a candy store as you check out all the models and features. However, the financing process can be confusing. Luckily, paperwork and financial agreements don't have to get in the way of enjoying your new vehicle. Keep reading to find out what to expect when financing a vehicle.

What to do beforehand.

Before financing your vehicle, it's essential to check the status of your credit score. A better score gives you a higher chance of qualifying for a lower interest rate. Learn what type of interest rates you should go after. Knowing what interest rates other institutions can provide will help with the negotiation process. Getting pre-approved can also help save time during the purchasing process.

You'll also want to set your budget ahead of time. When deciding what you can afford, it's best to keep your credit score in mind so that you can stay within your desired price range.

What you need to bring with you.

When purchasing a vehicle, make sure to bring these four primary documents with you:

1. Proof of income

Come prepared with copies of your pay stubs from last month as well as what you've been paid to-date the past year.

2. Credit and banking history

This includes information about other outstanding loans or financial obligations you may have, as well as how you've fared in the past financially. You might bring mortgage or lease agreements, alimony or child support payments, credit card statements or bank statements.

3. Proof of residence

Normally, personalized mail or your mortgage statement are enough to provide reasonable proof of residence.

4. Proof of insurance

You'll need to show your lender proof that your insurance company knows about your newly purchased vehicle and that it's properly insured.

If you aren't financing with the dealership, you will also want to bring along proof of your loan.

Know what determines the loan terms.

Auto loans usually last between three to five years. Your lender will run a credit check and ask questions about your income. Your interest rate depends on how secure the lender thinks your finances are. If you have a better credit score, manageable debt, a good standing with your insurer and a high income, you'll likely qualify for a lower interest rate. If not, you can plan what your monthly payments will be with a higher interest rate and try to make it as manageable as possible.

If you’d like to purchase a vehicle or want to know more about how to finance in Morganton, NC, drop by Morganton Honda at 1600 Burkemont Ave, Morganton, NC 28655 for a test drive. We look forward to serving our customers from Hickory, Asheville and Marion!