Common Auto Finance Terms
Common Finance Terms Explained in Greer, SC
Ready to finance a vehicle, but concerned about the process being stressful and frustrating? Don’t worry — here at D&D Motors, we’ve got you covered. You don’t have to stress about the paperwork and hassle of financing when you shop for a new or used vehicle with us, because our team of finance experts works hard to streamline the process for you. In fact, because we want you to feel comfortable and confident before you even step foot in our dealership, we’ve compiled a list of common finance terms you should know below. Whether you’re a first-time buyer or just need your memory refreshed, we encourage you to take a look at this lingo and you’ll be ready to visit our finance department and sign on the dotted line for a car you love!
Financing
Financing is a great option when you aren’t able to pay for a vehicle with cash. When you finance, you can pay for your new ride over time, making monthly payments for a few years until you have paid the full cost.
Leasing
Leasing is essentially a way to rent a vehicle for a longer period of time than traditional car rentals allow (usually 24-36 months). You pay monthly lease payments for that set period, and then once your lease ends, you can either purchase the vehicle or return it.
Term
A term is either the length of your lease or the amount of time you have to pay off a loan.
Principal
Your principal is the loan amount you are paying off, without interest included.
Down Payment
When you purchase or lease a vehicle, you make a down payment upfront and then pay off the rest over time. Your down payment amount is based on your credit history, your lease or loan terms and other variables.
Interest
Interest is a fee for borrowing money, charged by your lender.
Cash Back
Vehicle manufacturers will often offer cash back as an incentive for customers to buy new models. You may hear of cash back referred to as a “rebate,” which can be used toward your down payment or sent to you as a check after purchase.
Trade-in
When it’s time to say goodbye to your old car, trade it in and you can apply its value towards your new or used vehicle purchase or lease. This is a great way to save money and sell your old ride in one seamless transaction.
Depreciation
Depreciation refers to a vehicle’s loss of value over time. As soon as a vehicle is driven off the dealer’s lot, it begins to depreciate and continues to lose value throughout its lifespan.
Equity
Your equity is the difference between what you owe on your car and its appraised value. You can find your equity by subtracting your loan balance from your car’s worth. For example, if you owe $7,000 on your vehicle and it’s worth $20,000, you have $13,000 in equity on it.
Upside Down
When you’re upside down, you owe more on your vehicle than it’s worth. This is also called “negative equity” and it’s a situation to avoid if at all possible.
If you have questions about our finance process, or if we can help clear up any of these or other financial terms that you don't understand, please let us know. Give us a call, contact us online or stop by D&D Motors at 13655 East Wade Hampton Blvd., Greer, SC 29651, near Greenville, Spartanburg and the Upstate. We look forward to chatting with you!