When it comes to buying a new car, you need to know what you’re getting into. And when it comes to understanding what documents you’re signing, we at Carl Hogan want to make sure you understand what you’re agreeing to. We’re often asked what these financing terms mean, so we’d like to share their definitions with you.
APR: Stands for annual percentage rate, or how much interest you will pay on a loan over its entire length.
Depreciation: The difference between the initial cost of the car and what value it still possesses after a given time.
Down Payment: The amount of money you pay immediately when buying or leasing a vehicle.
Equity: The value of your car in comparison to how much you still owe on it (could be good or bad).
Gap Insurance: Financial protection that covers the difference between the value of your car and how much you still owe on it.
Lease: Instead of owning your car, you borrow it from the dealership for a set cost and length of time.
MSRP: The price which a manufacturer recommends that a dealership sells a car for.
Principal: The total money you still owe on the original cost of the car, not including interest or other fees.
Still have questions? No problem! Contact us or come in and talk with one of our finance representatives. We would be happy to explain anything that is unclear so that you are well informed on the terms of your new vehicle from Carl Hogan!