Finance terms can be confusing, but a little knowledge goes a long way when buying or leasing a vehicle. Check out these common finance terms, and if you have any questions contact the team here at Charleston Mitsubishi.
The APR, or Annual Percentage Rate, is the amount that the borrower pays for taking out a loan. It’s normally expressed as a percentage rather than a dollar value.
In finance, Credit normally refers to credit score. Lenders use a buyer’s credit score to determine how reliable of a borrower the buyer really is. Those with low credit scores are viewed as a higher risk and may experience more loan application rejections. Borrowers with high credit scores are a lower risk and enjoy more loan offers.
A Down Payment is the money a borrower puts towards the purchase price of a vehicle. A larger down payment reduces the amount financed, which can result in a shorter loan term or more affordable monthly payments.
Leasing a vehicle means paying a monthly fee for using the car. At the end of the contract, the lessee has to return the car to the dealership at no extra cost. The driver doesn’t own the vehicle at the end of the lease. Once a lease expires, the lessee has to either purchase the vehicle outright or select another vehicle.