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How to pay for a car

Discover options for financing a car and determine the right one for your financial situation.

Like many car buyers, you may not have all the cash to pay for a car up front. Luckily, there are many financing options available for you to consider, whether you’re purchasing a new or used car.

A loan or line of credit

If you’re interested in owning a vehicle, applying for a credit line or loan can give you the money for all or part of the cost of a car. Depending on the terms of the loan, it typically takes between 48 and 72 months of monthly payments until you own a car, free and clear. Here are some loan and credit options to consider:

  • Auto loan. If you choose an auto loan, you’ll pay a fixed monthly amount plus interest, until it’s paid off. To get an idea of what that monthly figure will be, simply enter some basic information into Wells Fargo’s Vehicle Rate and Payment Calculator.
  • Personal line of credit. A line of credit may be a suitable financing option for you if your monthly income goes up and down. With a line of credit, you can choose to pay more in one month and less the following month depending on your income for that month. Since getting approved for a line of credit typically takes less time than getting approved for a car loan, it can be helpful if you want to make a purchase in the near future. A Wells Fargo line of credit can give you access to funds in as little as one to two business days.
  • Home equity financing. If you're a homeowner, you can use your available home equity funds to pay for any kind of vehicle, no matter where you're buying it.  Wells Fargo home equity loans and lines of credit offer lower interest rates than many other types of credit accounts and your interest may be tax-deductible, increasing your savings. (Consult your tax advisor).

Financing a new vs. used car

When you purchase a car, you must choose between used or new, but there is relatively no difference in financing one over the other. The difference comes down to the price and value of the vehicle. Price and value factor in securing a loan, regardless of whether the car is used or new. Used car financing may include an extended warranty on the vehicle, but that’s not always the case.


If your goal isn’t complete car ownership, you may want to consider leasing. With a lease you pay monthly payments as you would with a loan, but you're paying for the use of the car, rather than for the car itself. Lease payments are usually less than loan payments, and leasing allows you to drive a new car every few years.

Once you examine your options for financing a vehicle and find the right one for you, you’ll be on the road before you know it.

Wells Fargo can help you get started with an Auto Loan today. Apply online and receive an initial credit decision in minutes.