At JAB Automotive LLC, we help you find the perfect used vehicle for you and provide a financing plan suited to you. This glossary of common finance terms is a useful resource that will help you learn the ins and outs of car financing.
APR stands for “annual percentage rate,” which is the amount of money you’ll pay per year to take out a loan. It’s the cost of the interest on the loans as well as any additional fees.
This is the remaining amount of money the borrower has on the loan before it’s paid off.
A person’s credit score is attached to their financial history. It is used by lenders to determine how likely an individual is to pay off a loan. Several things factor into a person’s credit score, including whether or not a person has made payments on time, how much a person owes, and how many sources of credit they have.
Almost all vehicle purchases require a down payment. This is a payment that a buyer puts toward the total cost of a vehicle. The larger the down payment, the less a person will need to borrow through a loan.
A lease is an agreement with a dealership where a customer borrows a vehicle for a couple years. While buying a vehicle means that a customer owns it, leasing a vehicle is essentially the customer renting it. When a lease is up, the customer returns the vehicle to the dealership. Leases can be less expensive than loan payments, so are sometimes valued for their affordability.
When looking for a loan, you can turn to different lending institutions—any place who will loan money. This includes banks, credit unions, and even dealerships.
For more information on the financial process of buying or leasing a car, contact us at JAB Automotive LLC. We’d be glad to answer all your questions.