What Auto Finance Terms Mean
Woodhouse is the auto dealer that will help you on every stage of the new or pre-owned vehicle purchasing process. We aim to empower our drivers, which is why we provide tools and resources for financing and service. It’s also why we’re sharing everything you need to know about the vehicle financing process, like top vocabulary terms.
Top Financing Terms to Know
The more you know about and understand the auto financing process, the easier it will be to find the perfect vehicle at the perfect price. Here are some of the top terms to familiarize yourself with before you purchase your next vehicle.
The down payment is the amount of money you give to the dealership on the day you take home your new vehicle. The more money you are able to put down, the smaller your monthly payments will be and the more quickly you’ll be able to pay off your loan. That means big savings on accrued interest costs over time.
Interest is the cost of the loan. When you finance a vehicle, the lender sets an interest rate, a percentage charge of the total cost to be paid each month. The more quickly you pay off your vehicle, the less you’ll pay in interest.
Another deciding factor when it comes to the cost of your vehicle is the term length. This simply refers to the number of months your loan may be repaid over. Longer term lengths often have higher interest rates, but you want to make sure you have an affordable monthly payment for your budget.
Your credit score plays an important role when it comes to purchasing a new or pre-owned vehicle. It tells the lender how reliable you are to lend money to. The higher your credit score, the more agreeable your term options will be.
You have two main financing options to pick from, buying and leasing. When you lease a vehicle, you’ll have access to the newest cars on the market, as well as big savings on the down payment and monthly payments. Typically, you need a high credit score to lease a car.
These are just some of the helpful financing terms you’ll learn about here at Woodhouse. We also offer financing tools and resources like a payment calculator and vehicle trade-in value estimator. Find financing terms that meet your needs with the support of Woodhouse today.