Here are some of the terms that we hear most frequently in our Finance Office!
We know that some terms used can be a bit confusing for people who aren’t familiar with automotive financing, so we’ve made a list of some of the more common terms that you’ll come across when attempting to secure a vehicle.
Still unsure of what something means? Give us a call; (770) 282-3987, or stop by the finance department at out Mitsubishi Dealership in Morrow, GA and let us answer all your questions.
Annual Percentage Rate (APR): The percentage of interest you will be paying per year (rather than on a monthly basis) for a loan.
Destination Charge: The fee charged to cover the cost of transporting a vehicle from the factory to the dealership.
Down Payment: The amount of money you put toward a vehicle upfront.
Loan: You probably already know this word, which refers to an amount of money borrowed from a financial institution like a bank to cover the total cost of a vehicle.
Manufacturer’s Suggested Retail Price (MSRP): The recommended sticker price for a vehicle. Oftentimes buyers end up purchasing a vehicle for less than this amount through negotiations.
Pre-Qualify: The act of qualifying for a loan without agreeing or committing to it. It’s helpful to be pre-qualified for a loan before you negotiate the price.
Prepayment Penalty: If you pay off a loan early, financial institutions will often charge a prepayment penalty to make up for interest lost over the time you would’ve spent paying off the loan.
Principal: The amount borrowed for a loan.
Term: The agreed-upon amount of time a loan will last.
Trade-In Value: The amount of money a dealer will give you when you trade in an old vehicle to buy a new one.