Sometimes, buying a new car can be a confusing process. Fortunately for you, we’re here to help. Here at Bill Alexander Ford Lincoln, we’re committed to helping our customers through every step of the car-buying process. Our goal is to make it as simple as possible. One way we hope to help you out is by compiling a short list of some of the most common finance terms. Hopefully, these will help make the process a bit more understandable.
- Financing: This is a method of paying for a new vehicle in which the consumer acquires funds from a financial institution to pay for the cost of the vehicle.
- APR: This stands for "annual percentage rate," which is the rate that you will be charged annually for borrowing money to pay for your new vehicle.
- Leasing: Similar to renting, leasing involves making payments on your new car for a set period of time. Once your lease ends, you will return the vehicle to its owner, either the manufacturer or the dealer.
- Interest rate: Like an APR, an interest rate is the amount you pay each year for borrowing money to buy a vehicle. Unlike an APR, however, the interest rate does not include the fees from your loan.
- Gap insurance: This is a special type of auto insurance meant to protect vehicle owners, since it insures the amount not covered by your leasing or financing agreement.