Tips on Financing

Apply Online

Online Calculator

Kia Motors Finance Company and Country Club Kia care about helping their customers have the best vehicle purchase experience possible. An educated consumer makes good choices about which vehicle to purchase and how to finance that purchase. This brochure was developed to give you information about financing your vehicle purchase. Information is the most important tool you have. We hope this brochure will help you gather information about financing your vehicle and will enhance your purchasing experience.

Steps to take before you go to the dealership

1. Know your credit worthiness -- it may affect your cost of credit
Creditors generally use the same kinds of objective measures of creditworthiness.

Most creditors emphasize your credit payment history as shown in a credit report from a credit bureau, such as
Experian (888-397-3742 or www.experian.com),
Equifax (800-685-1111 or www.credit.equifax.com) or
TransUnion (800-888-4213 or www.transunion.com).

Your credit report shows credit information such as debt you may have, whether you have made payments on time, or if you have not repaid debts.

Your credit report does not include information unrelated to your credit, such as your race, ethnicity, religion, or medical history.

You should obtain a copy of your credit report before you apply for credit. Contact the credit bureau of your choice by telephone or at its website.

If your credit report contains errors, you have the right to get them corrected free of charge by the credit bureau.

Negative information in your credit report may lead you to be turned down for credit or to pay a higher interest rate. For example, a repossession, bankruptcy or history of slow payments make it difficult for you to get credit on the most favorable terms, although less favorable terms may be available to you.

The actual interest rate for which you qualify may depend on several other important factors in addition to a credit score, such as your income, down payment and debt-to-income ratio.

Keep in mind that not all lenders report to all three credit bureaus. This can result in a varying credit scores by bureau. Take an active role to manage your credit score as you would any financial matter.

2. Improving your credit worthiness
Your credit score can be improved by developing long-term habits that include:

Avoid using your credit lines to the credit limits. Using a high percentage of the credit available to you makes you a risk in the view of lenders. Try to close accounts you seldom use and pay down existing credit lines.

Don't apply for credit you don't need. Scoring systems often view numerous loan applications as a sign that you are overextended. Apply to one or two lenders that have the best deal for you.

Pay your bills on time, every time. Lenders like a history of consistent payments made on time. Credit scoring models tend to reward stability.

Make sure your credit report is accurate. It's a good idea to check your credit report at least once a year and correct any incorrect information immediately.

3. Consider other factors that may determine your cost of credit
If your vehicle is the security for the loan or retail installment contract, your cost of credit may vary based on the amount financed, the amount of your down payment, and whether the vehicle is new or used.

Your cost of credit may also depend on the total number of payments (term), such as 48 months versus 60 months. Some creditors offer lower interest rates for shorter repayment periods.

4. Decide how much you want to pay each month
Consider what dollar amount fits within your budget, based upon your income and your expected expenses.

Remember to allow for insurance, taxes, title, registration and maintenance costs of your vehicle.

5. Do your homework
You may finance your purchase by entering into a retail installment contract with your Kia dealer, who has access to a wide range of credit sources, or you may seek a loan directly from a bank, credit union or other source. Research your possible credit sources. It's your choice.

Understand how retail financing generally works -- see our explanation in this brochure.

Find out what interest rates are currently available. Different creditors may offer credit on different terms. Many creditors offer a range of interest rates, depending upon the applicant's creditworthiness. For example, creditors usually offer their best interest rates to applicants with the best credit. The interest rate is usually higher for less creditworthy applicants. Your dealer likely uses many different indirect credit sources.

Understand how your cost of credit is measured: (1) The Annual Percentage Rate, or APR, is the cost of credit on an annual basis and is based on the interest rate and other charges. (2) The Finance Charge is your cost of credit as a dollar amount.

Learn about possible special low interest rates (such as 3.9% APR), which may be offered for a particular make or model.

Get preapproved for credit.

Sources of information include your Kia dealer, the Internet, newspapers and magazines, the library, your family or friends, or information directly from your bank or credit union.

6. Gather items you may need to make a credit application at the dealership
• Driver's license for identification purposes.

• Employment and salary information, including paycheck stubs.

• Information about other sources of income, including alimony, child support or retirement income.

• Information about your bank accounts and other creditor accounts.

• Personal references with phone number and addresses.

• Calculator.

At the dealership

1. Understand your options
Your dealer can tell you about the financing sources that the dealer may use to sell your retail installment contract.

Ask the dealer about current interest rates.

Ask the dealer whether there are any special financing programs available for certain vehicles models for customers with your credit qualifications.

2. Making and financing your Kia purchase
You and the dealer will agree upon the price of the vehicle, the value of your trade-in, the cost of any extra features, and the APR. These terms are negotiable.

Remember that the total cost of credit will be based on everything you finance, including vehicle service contracts, credit insurance, GAP premiums, and other options you have chosen.

The monthly payment should fit in your budget, but you should consider all aspects of the deal.

Confirm your APR
The dealer can help you look at several options if the monthly payment amount is too high:

• Make a higher down payment to reduce the amount financed

• Choose a different vehicle model

• Adjust the vehicle features or insurance options

• Finance for a longer term

• Lease the vehicle

It's up to you to let the dealer know what vehicle features or aspects of the deal are important to you, or if certain terms are not workable for you. The dealer wants you to be satisfied with your purchase and the financing for this purchase.

How financing works at the dealership

» You make a credit application
If you decide to finance the purchase of your vehicle at the dealership, you will make an application for credit. You will give the dealer permission to see your credit report and obtain other credit and employment information.

» You enter into a retail installment contract with the dealer
You will enter into your contract directly with the dealer. The dealer is the seller/creditor and you are the buyer/debtor. You should review and agree to all the terms of the contract, including the amount financed, the APR, the number of monthly payments and the monthly payment amount.

» Consider your cost of credit
Your dealer can provide competitive rates to finance your purchase, as there may be several indirect credit sources competing for his business, and the dealer knows you may have other credit options like a bank or credit union. The dealer may also be able to provide financing for customers who cannot get it elsewhere or may offer financing for high risk customers on better terms than they can get elsewhere.

» Your dealer may sell the contract
After you and the dealer sign the contract, the dealer may sell the contract to Kia Motors Finance Company, a bank, another finance company or other financing source. Some large dealers may keep the contract and have you make the monthly payments to the dealer, but most dealers do sell their contracts. If the dealer sells the contract, you will make the monthly payments to the creditor who buys the contract. This creditor is also called the "assignee" and the sale of your contract is referred to as an "assignment." Selling your contract will not change its terms.

» Your dealer is a locally owned, independent business
The dealer is an independently owned and operated business, part of your local business community. It is not part of the manufacturer or any financing source. For example, your Kia dealer sells Kia vehicles but is a separate business and is not related to Kia Motors Finance Company. The dealer is not required to sell your contract to Kia Motors Finance Company or any other financing source. At any one time, a dealer may be selling its contracts to a half a dozen or more financing sources, including banks and other finance companies, to accommodate many varied transactions.

» The bank or finance company may pay the dealer a fee for the contract
Because of the dealer's role in financing your vehicle purchase, the assignee usually pays the dealer a fee for your contract. The assignee may pay a flat fee or may pay a fee based on a percentage of the amount financed. For example, if the APR is 8% of the amount financed, the dealer may receive $150 for the contract or the dealer may receive a dollar amount based on a percentage of the amount financed. This fee is sometimes called "participation."

This payment is between the assignee and the dealer and does not change any of the contract terms that you have agreed upon with the dealer. The fee reflects that by making a credit contract with you, the dealer has saved any assignee the entire overhead and other expenses of providing credit to you directly. Also, the dealer likely has dedicated more time, effort, and resources to your credit contract than needed for a cash sale or for a customer who arranges his or her own financing. In addition, the dealer offers you the convenience of financing with the dealership directly, rather than having to make separate trips to banks or other financing sources. For these reasons, the dealer deserves to be compensated by the assignee.

» The dealer may sell its contracts to several different financing sources
The dealer sells contracts to different sources to finance vehicle purchases by customers with varied creditworthiness. Some banks and other creditors will buy only contracts of customers who have the best credit; other creditors, including some finance companies, are willing to take more credit risky customers. Based on his or her experience, the dealer will offer to sell the contract to the creditors whose level of risk is consistent with the customer's creditworthiness. In this way, your dealer can provide financing to wide range of customers.

Frequently asked questions

» How is my APR determined?
Your creditworthiness and the other terms of your contract (such as the number of payments, your down payment, the amount you are financing) may affect your APR. Another consideration may be the likely rate that a potential assignee(s) might pay to purchase your contract. Like your other contract terms, your APR is set between you and the dealer.

» The dealer asked me to sign a credit application, which says BANK XYZ can look at my credit information. Why?
Based upon Bank XYZ's response to your credit application, the dealer may assign your contract to Bank XYZ. The law restricts who may access your credit information.

» My retail installment contract has a logo for ACME FINANCE COMPANY
at the top. Does this mean that ACME is the creditor?
No. The dealer may or may not assign your contract to ACME, but if he does, ACME will then be the assignee of your contract. Often, banks or finance companies supply forms to dealers, some of which contain their logos, as a way to remind dealers to consider them as possible purchasers of the contracts. Also, potential assignees like to make sure that the dealers have access to contract forms that meet current legal requirements, because an assignee may have liability for some form defects.

» Doesn't the bank or finance company set my APR?
No. The APR, like other contract terms, is determined between the dealer and you. The dealer may have a fairly accurate expectation of what a bank or finance company will pay the dealership for your contract, and may consider this and many other factors in agreeing upon your APR.

» Does the bank or finance company pay the dealer for the contract?
Usually, the dealer receives some payment from the contract's assignee. This may be based upon a percentage of the APR or it may be based on a flat fee. The payment is made after you and the dealer set the APR.

» The dealer is making money on my purchase. Why does he make money on my financing?
The dealership saves the assignee the overhead expense of originating your financing. In addition, your dealer uses his or her knowledge, experience, and resources to locate an appropriate assignee for each retail installment contract. The dealer may spend considerable efforts in this process - efforts that would not be needed for a cash sale or where a customer has arranged for financing. Also, in some cases the dealer takes on risk, because after a contract is assigned, under certain circumstances, the dealer may be obligated to buy it back. Finally, from the customer's perspective, the dealer provides convenient, on the spot financing, usually at competitive rates. As a result, customers can often drive away in their new vehicle without having to return to the dealership or make application to other creditors.

» My dealer sent my credit application to a bank before we even wrote a contract. Why?
The dealer may begin to look for potential buyers for the contract even before the deal is complete. That permits the dealer to make sure the terms of the contract will make it marketable to an indirect creditor.

» My brother and I got different rates financing the same model car from the same dealership in the past couple months. Why?
There can be many reasons for the difference. Probably there are differences in your creditworthiness such as existing debt, for example, even if your incomes are similar. Interest rates may have fluctuated. Your knowledge of the deal may have made a difference, too.

» How does a dealer decide which source to sell my contract to?
Many factors may influence the dealer's decision. The dealer tries to maximize the chance you will buy from the dealership, so the purchase terms the dealer can get from an assignee may affect the decision. Also, the dealership needs to cover its costs. In some cases, the deal may only meet the criteria for one or two creditors.

» How do I know the APR, Amount Financed, etc.?
These terms are set apart on your contract in the "Truth in Lending" box. The dealer will give this information to you to review before you sign your contract. You should take the time to be sure you understand these terms.

» Does the Truth in Lending box show the price paid to assign the contract?
No. This box shows the cost of credit to you. You are entitled to the credit terms you agreed upon. The Truth in Lending box does not show the business arrangements between the dealer and any potential assignee.