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Common Auto Finance Terms
Common Finance Terms Explained in Lafayette, LA
Have you found your dream car here at Giles Nissan Lafayette? We’re just as excited as you are! Whether you’re planning to drive off our lot in a new or used car, we’ll make the purchasing or leasing process as easy and stress-free as possible. There’s no need to be intimidated by the prospect of sitting down with our finance team, as our experts are eager to help you find the right lease or loan for your needs. They’ll be happy to answer your questions along the way. To help you prepare for your visit to our dealership, we’ve compiled a list of commonly used financing terms below. Take a look to refresh your memory so you’ll feel fully confident when you visit us to sign on the dotted line for your new ride.
Financing
Financing a vehicle allows you to pay for it over time. You’ll take out a loan and pay it off in monthly installments, and once it’s paid off, you’ll own the car in full.
Leasing
When you lease a vehicle, you’re essentially renting it for a set period of time (usually 24-36 months). Once your lease ends, you simply have to return the vehicle to the dealership and pay any applicable fees.
Term
A term is how long a loan or lease will last.
Principal
The principal is how much of the loan you still have to pay off (without interest included).
Down Payment
When you buy or lease a car, you’ll generally make an upfront payment at the dealership. This is known as a down payment, and it’s applied toward the vehicle’s cost. The size of your down payment will depend on your credit history, your agreement terms and your cash on hand.
Interest
A lender will charge an amount of money, known as interest, as the cost of borrowing money from them.
Cash Back
Auto manufacturers will offer cash back to encourage customers to buy new vehicles. Cash back is also known as a rebate, and you can either use it toward your down payment or receive it in the mail as a check.
Trade-in
If you’re ready to say goodbye to your current car, trading it in here at Giles Nissan Lafayette is a great way to make room in your driveway. We’ll make you an offer on your ride that you can apply to the cost of your new vehicle, helping you keep money in your pocket. Find your vehicle’s value on our website today!
Depreciation
A vehicle loses value, or depreciates, over time. A new car begins depreciating as soon as it is driven off a dealer’s lot and continues to lose value throughout its lifespan.
Equity
Your equity in your vehicle is its value minus what you still owe on it. In other words, it’s the percentage that you own (as opposed to what the bank still owns). For example, if your vehicle is worth $20,000 and you owe $5,000 on it, you have $15,000 in equity.
Upside Down
Being “upside down” on your loan means you owe more on your vehicle than it is worth. Also known as “negative equity,” this situation is one you want to avoid if possible.
If you have questions about our finance process, or if we can help clear up any of these or other financial terms that you don't understand, please let us know. Give us a call at 337-210-9001, contact us online or stop by Giles Nissan Lafayette at 6137 Johnston Street, Lafayette, LA 70503 , near New Iberia, Abbeville, Youngsville and Broussard. We look forward to chatting with you!
