Car Financing Terms Which You should Know Before Applying

Car Financing Terms Which You should Know Before Applying

Car Financing Terms Which You should Know Before Applying for a auto finance. Before signing any document, whether at the dealership, bank, financial company or credit union, you should understand the specific terms of the financing.

Assignee or assignee – The bank, financial company or credit union that buys the contract from the concessionaire.

Financial charge – The cost of credit expressed in a dollar amount. You can negotiate this figure.

Extended service contract – Optional protection that can be purchased to cover specific mechanical and electrical components of the vehicle. Complements any warranty coverage that comes with the vehicle.

Fixed-rate financing – A financing with a financial rate that remains the same throughout the duration of the contract.

Variable rate financing A financing with a financial rate that varies, and accordingly, the amount you must pay is also modified over the duration of the contract. This type of fee is not very common in vehicle financing transactions.

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Credit Report – A document that includes information about your place of residence, how you pay your bills, and whether you have been sued or declared bankrupt. Credit reporting agencies across the country sell the information in your report to credit grantors, insurers, employers and other businesses that use it to evaluate your credit, insurance, employment or rental applications.

Amount of payment or monthly fee – The amount of dollars you must pay each month to cancel the loan, financing agreement or leasing agreement.

Amount financed – The amount of credit expressed in dollars.

Initial payment – An initial amount that is paid to reduce the amount to be financed.

Negotiated vehicle price The purchase price of the vehicle agreed between the buyer and the seller. This price should reflect every discount, discount or special offers you can get at the dealership if you meet certain requirements, all of which must be clearly informed.

Additional products or services – Products or services that the concessionaire can offer you in a sale, financing or leasing. Some examples are extended service contracts, credit insurance and guaranteed automobile protection. These products and services are optional. Ask that the contract include the costs and terms of the additional products and services, and only agree to sign for those specific products you wish to purchase.

Guaranteed car protection (GAP) – Optional protection that covers the difference between the amount you owe for the vehicle and the amount you would receive from your insurance company if your vehicle was stolen or if you had an accident of destruction before you canceled your credit obligation

Credit score – A number that reflects your level of credit risk that is based on the information in your credit file. The better your credit history, the higher your score. Your credit score can be used to help determine the interest rate and financing terms that will be offered.

Recovery – If you do not make payments for a vehicle within the established deadlines, your creditor may have the right to recover it without resorting to the Court or notifying you.

Credit insurance – Optional insurance that covers the expected unpaid balance in the event of your death or the scheduled monthly payments in case of a disability. The cost of optional credit insurance must be established in writing. If you decide to buy it, you must sign to accept down payment car insurance is also a alternate of credit insurance for cars

Wholesale rate (purchase rate) – The financial rate applied by an assignee or assignee when you buy a retail contract in installments from a dealer.

Annual percentage rate or “APR” rate – The cost of credit expressed in terms of annual rate. You can negotiate this rate. Examples of some of the factors that influence your APR rate: your credit history, current financial rates, dealer compensation, competition, market conditions and special offers. Try to negotiate the lowest APR rate in the same way you negotiate the price of the vehicle.

Total payments – The total amount paid after making all scheduled payments as set out in a loan or financing contract. For a lease, it is the amount you will have paid at the end of the lease.

Negative net value – The amount due on a vehicle that exceeds its market value. For example, if the balance due to cancel your credit amounts to $ 18,000 and the market value of your vehicle is $ 15,000 you have a negative net worth of $ 3,000.

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