Most drivers don’t find it necessary to keep up with the terms and definitions found in financial documents. That’s why many car dealerships keep a fully staffed finance department up and running to assist customers with their purchases. Even so, many buyers may struggle with buying a new car. Check out this quick list of common finance terms you might come across in your next automotive purchase!
Annual Percentage Rate – Lenders charge a fee for use of their money when financing a new or used vehicle. Otherwise known as APR, the annual percentage rate is determined by a borrower’s credit history and score. Those with higher scores will receive lower rates while buyers with low scores will see higher rates.
Cosigner – Whether a first time buyer or a driver who made some credit mistakes, a cosigner can help reassure lenders. A cosigner is essentially a “backup buyer” who will take over the monthly payments if the signer fails to keep up with them. Buyers with bad credit can increase their odds of getting a loan by having a cosigner.
Down Payment – Many car dealerships will take a used vehicle in exchange for credit on a new vehicle. A down payment is the lump sum paid to reduce the total amount financed. A higher down payment means lower monthly payments over the course of the loan. Buyers with bad credit could stem lender’s fears with a hefty down payment.
Lease – Drivers who can’t afford the monthly payments on a new car could get behind the wheel by leasing. A lease is essentially a long-term loan where the driver pays the difference between the new value and predetermined used value. While a lease comes with a number of restrictions, it’s one of the best ways for drivers short on liquid assets to get into a new car.
Contact the fantastic finance department at Pollard Used Cars in Lubbock to get your dream car!