The decision of which car to buy can be overwhelming, especially if you aren’t aware of all of the financial terminology that is used. Taking the time to learn the lingo of car dealerships (such as what you will hear when looking for a Cadillac at an HGreg) can be beneficial in your search. Here are just a couple of the more common financial terms that can prove useful, as well as tips for you the buyer to be more aware.
The Annual Percentage Rate (or APR) refers to a loan’s interest rate which is essentially the loaner’s fee for allowing you to use their money.
Buyer Be Aware: The APR can be influenced by many factors, not the least of which is the present economy. Do research on what a good APR is for your area of the country (such as in Miami, Fl) as well as for your credit score.
The simplest way to define ‘credit score’ is as a range of numbers from 300 to 850 that determine your ability to repay a debt. So when a lending institution considers your credit history and either a low score closer to 300 or a high score closer to 850, they are looking to see if you have established a pattern of paying your debt on time and in full. After all, they want to be sure that the money they are loaning for your new Cadillac is a sure bet to be returned.
Buyer Be Aware: Knowing your credit score before you search for a new (or new-to-you) vehicle is critical to your success. If you have a realistic expectation for what your credit score will earn you in a loan, for your APR, etc then you will more quickly be able to get your hands on the steering wheel of your very own car.
Making a down payment on an automobile purchase reduces the overall cost of your loan. The more money you have to offer from the start of the transaction, the lower your monthly payments and interest costs.
Buyer Be Aware: Obviously, choosing a make of vehicle that has a higher value and cost is going to require more money to pay. For instance, if you find a Cadillac in Miami that you fall in love with, chances are it’s going to require a higher overall cost and possibly even a larger down payment.
The Manufacturer’s Suggested Retail Price (or simply the retail price) is what the car maker recommends any dealership lists as the sale price. Essentially this is the price tag for the car.
Buyer Be Aware: A completely common and acceptable practice among some dealerships is when they choose to add on to the price in the hopes of increasing their own profit. The MSRP is, after all, merely a suggestion. This is why researching ahead of time gives you leverage to negotiate the best price on any automobile – the best price for the Cadillac of your dreams, purchased with the help of HGreg, in Miami, FL.
Understanding basic financial terminology prior to any trip to the car dealership will help you to achieve your goal of finding and financing your dream car. Use your time wisely so that you can invest fruitfully in the vehicle that’s right for you.