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Trying to slog your way through the process of buying a car, but aren't sure what all those financial terms mean? Here's a short list of common words used when discussing things like auto loans and negotiating the cost of a vehicle, so you can go into the dealership without feeling like the sales representatives are speaking a different language.
Stands for Annual Percentage Rate. Refers to a calculation of the amount of interest you pay per year as opposed to just the monthly fee. This is calculated based on the loan amount.
Also referred to as the sticker price or Manufacturer's Suggested Retail Price (MSRP), this is the retail price of the standard model of a particular vehicle before any available features or packages are added.
Additional fees applied to the purchase price when negotiating the price. This can include costs such as the title and appraisal fees.
Can refer to your credit score, which is calculated based on your financial credit history in order for financial institutions to quantify your reliability in making payments.
An amount of money you put toward the total cost of your vehicle. This can reduce monthly payments and the amount owed in return for a loan.
An additional cost incurred when you owe money. You will pay a certain percentage of interest on a loan over time. This is how financial institutions make money off of loans.
Money borrowed from a financial institution. In the case of a car loan, you use it to pay for the total cost of a vehicle and pay it back over time.
The length of a loan often referred to in months. If you pay off a loan before the end of a term you may incur financial penalties to prevent the bank from losing money incurred by interest.
When shopping for a vehicle, one of the first choices you need to make is whether you want to buy something brand new or something used. We'll take a look at the pros and cons of each type of car to help you figure out what fits your lifestyle better. ...Read more!