When you finance a car, a lender, usually a bank or alternative financing institution, allows you to buy the vehicle through credit in return for a promise to make regular payments until the balance has been paid in its entirety. Once you have finished the payment plan, you own the car outright. When you finance you need to keep in mind that you are responsible for the balance of the loan even if you decide to trade it in or sell it. Financing is a great way to get a car that suits your needs while keeping your monthly costs low.