Auto Finance Terms
Everyone deserves access to reliable transportation
At Dave Says Yes, we believe that everyone deserves access to reliable transportation, regardless of their credit history. That’s why we strive to make financing easy and accessible for all customers, even those with no credit, bad credit, or damaged credit. We understand that financial setbacks happen, and we’re here to help you get back on track. Our experienced finance experts work with a wide network of lenders to find flexible financing options tailored to your specific situation. Whether you’re a first-time buyer or have experienced credit challenges in the past, we’re committed to providing transparent, dignified, and hassle-free financing solutions. We believe in second chances and are dedicated to helping you find a vehicle and financing plan that fits your budget and needs. Let our team of experts help you take the first step towards rebuilding your credit and driving away in the car of your dreams.
We want to offer as much information and as many tools as we can to help you build or repair your credit and feel at ease proceeding through the process. That’s why we’ve provided a comprehensive guide to auto finance vocabulary terms and what they mean, which you can read below. We not only have a full staff of auto finance experts with over 50 years of combined experience at your disposal, we also pride ourselves on a no-pressure environment. Just an opportunity for you to find a reliable vehicle and an experience that you feel great about!
APR – Annual Percentage Rate
Assignment – A transfer of a loan from one lender to another.
Base Price – The costs of a car with standard equipment incentives and freight.
Certificate of Title – A legal document issued by a state at the time of sale.
Co-Signer – A person who takes on a loan if the original borrower stops paying.
Default – Failure to meet the terms of a loan agreement.
Interest – A percentage charge for a loan.
MSRP – Manufacturer Suggested Retail Price
Refinance – When one loan is used to pay off another.
Underwriting – Verifying the data used to obtain a loan.
Auto Loan – A loan provided by a financial institution or lender to help finance the purchase of a vehicle. The borrower agrees to repay the loan amount plus interest over a specified period, usually in monthly installments.
Down Payment – An initial payment made by the buyer when purchasing a vehicle. It is typically a percentage of the total purchase price and is paid upfront. A larger down payment reduces the loan amount and can result in lower monthly payments.
Interest Rate – The percentage of the loan amount charged by the lender as interest over a specific period, usually expressed annually (Annual Percentage Rate or APR). It affects the total amount of interest paid over the life of the loan.
Loan Term – The period over which a loan is scheduled to be repaid. It is commonly expressed in months, such as 36, 48, or 60 months. A longer loan term typically results in lower monthly payments but may result in paying more interest over time.
Monthly Payment – The amount of money paid by the borrower to the lender each month to repay the loan. It includes both the principal amount borrowed and the interest accrued over the period.
Principal – The original amount of money borrowed in a loan, excluding any interest or fees. It is the base amount upon which interest is calculated.
Term Length – The duration of the auto loan, typically measured in months. It represents the total length of time over which the borrower will repay the loan.
Credit Score – A numerical representation of an individual’s creditworthiness, based on their credit history and financial behavior. Lenders use credit scores to assess the risk of lending money to an individual. Higher credit scores generally qualify for better loan terms and lower interest rates.
Pre-approval – A preliminary approval process in which a lender evaluates a borrower’s creditworthiness and determines the maximum amount they are willing to lend for a vehicle purchase. Pre-approval provides buyers with a better understanding of their budget and negotiating power when shopping for a vehicle.
Trade-in Value – The appraised value of a vehicle that is being traded in as part of a new vehicle purchase. The trade-in value is typically subtracted from the purchase price of the new vehicle, reducing the amount financed or the down payment required.
