 TITLE: How Does Financing a Car Work? CONTENT: Alternative Types of Auto Financing\n-----------------------------------\nTraditional auto loans aren't the only way to secure and pay for a car. Here are some other options that may work for you.\n*   **Leasing a car**: Leasing offers a way to drive a new car without buying it. A lease is essentially a long-term rental, so you'll return the car to the dealership or leasing company after driving it for a few years. Monthly lease payments are generally lower than a loan payment for the same car would be. Leasing a car typically requires a down payment and fees, and you may have to put up with some restrictions—there may be a limit on how many miles you can drive each year, for instance. However, if your goal is to drive the latest vehicle without making a big investment, leasing could be an option. Just keep in mind you'll need good to excellent credit to qualify for most leases.\n*   **Paying cash**: Paying for a car in cash isn't feasible for most people, especially if you have your heart set on a brand-new model. But for those who can manage it, paying cash eliminates the need to take out a car loan. Chances are, you'll need to save up a few thousand dollars for a down payment anyway. If you don't need the car immediately, take the time to save up a little more. As long as you don't need all the bells and whistles and just want basic transportation, you can find reliable used cars for $5,000 or less.\n*   **Peer-to-peer lending**: Peer-to-peer (P2P) loans are made not by banks or car dealerships, but from one individual to another. These are personal loans you can use for any purpose, including buying a car. You can find P2P loans on online platforms, such as Prosper, Lending Club and Peerform, that match you with individuals willing to issue loans. Interest rates on P2P loans can vary widely, and you'll generally need good credit to get approved; however, it's easy to apply online and compare different interest rates and terms to find the best peer-to-peer loan. END