Interest Rate:
The Periodic charge, expressed as a percentage,
for the use of credit.
Loan Term:
The length of time that it will take to repay the loan.
Typical loan terms are 12,24,36,48 or 60 months. Other terms
may be available. Term length has a larger impact on the
monthly payment and the final amount repaid than interest
rates.
Purchase Price:
The amount of money agreed upon by both parties
as the value of the item for sale. Negotiation can cause
this figure to be different from the Manufacturer's Suggested
Retail Price (MSRP).
Down Payment:
The up-front cash payment that the buyer makes
to reduce the amount borrowed to purchase a car; the difference
between the loan amount and the purchase price. A trade-in
allowance and/or rebate also may be used as down payment.
The down paymnet helps protect the bank, credit union or
finance company in case the borrower defaults on the loan.
A typical down payment is about 20 percent of the vehicle's
sale price.
Trade-in Value:
The amount a dealership credits you for the used vehicle
you provide as partial payment for another vehicle. The
amount credited is often about 5 percent below the vehicle's
wholesale market value.
Sales Tax:
A state, county and/or city surcharge added to the cost
of certain items sold within a specific geographical area.
This is usually a percentage of the total cost of a transaction,
anywhere from 3% to 10%. Sales tax can very greatly from
county to county, due to county and/or city surcharges.
Vehicle Registration Fee:
A fee charged by the state to legally register
the vehicle in that state. Some states charge a flat fee,
while others base it on the specific vehicle registered.
Also called a licensing fee. |
