Common Finance Terms In Bensenville, IL

When you buy a new car, it can be exciting, but it can also be scary. Especially when there's a bunch of finance terms you'll need to know. So if you're buying a car, here are a few terms to have on hand.

 

Annual Percentage Rate (APR)

This refers to the specific amount of interest you'll pay on a loan yearly, determined at the time you get the loan from the dealer or bank.

 

Auto Loan Term

The loan term refers to the length of time you have to pay off your loan. There are both short- and long-term loans: short-term which will give you bigger monthly payments, and long-term loans which will give you smaller monthly payments.

 

Credit Score

This is a number that tells a bank or dealer your potential credit risk when you borrow money from them. You'll need to know this to obtain a loan or determine lease payments.

 

Down Payment

This is the amount of money you'll have to pay at the signing of your loan or lease to take home your car. It's typically 10% - 20% of the overall cost of the car.

 

Monroney sticker price/dealer sticker price

This is a sticker that's required to be on the car window. It includes the base price, manufacturer's installed options (with the manufacturer's suggested retail price), destination charge, and fuel economy.

 

MSRP

This stands for Manufacturer's Suggested Retail Price, which is the suggested retail price for a vehicle. The dealership can determine their price off of this price.

 

Principal

This is the amount of money in total that's borrowed for a loan.

 

Trade-in Value

This is the price a dealer will offer you for your old car that you can put towards your new car.


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