Used car shopping is always easier when you know what youíre talking about.† Here are some common used auto loan terms that can help you get up to speed quickly so you can follow even a fast talking used car salesman.
Annual Percentage Rate (APR)
The cost of credit as a yearly rate. The percentage results from an equation considering the total amount financed, the finance charges, and the term of the loan. Usually not the same as the interest rate.
The cost of a car without options.
Money paid to make up the difference between the purchase price and amount financed. Down payments usually are 10 percent to 20 percent of the selling price.
Gas Guzzler Tax
A tax on vehicles that get poor gas mileage.
Stands for Manufacturer's Suggested Retail Price. It represents the manufacturer's recommended selling price for a vehicle and each of its options.
The used car dealerís suggested retail price for a vehicle. Also called "List Price".
Describes a situation where the balance owed on a used car loan is greater than the current value of the vehicle.
Additional Financing Tips
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