Are you confused about the process of purchasing and financing a car? Here's a few common terms that should help you understand what's going on when you're shopping for a new ride.
APR or Annual Percentage Rate: This is how much interest you will be accumulating on your loan on a yearly basis rather than monthly, expressed as a percentage.

Credit Score: A three-digit score representing your credit history that financial institutions use to determine whether or not they should invest in you by lending you money. Typically lower credit scores will have to pay higher interest rates.

Down Payment: A dollar amount that you pay in cash upfront. A larger down payment can reduce the amount of money you need to finance as well as monthly payments.

Interest: The cost of taking out a loan. Your loan will accumulate a certain percentage of interest, which is how banks and other financial institutions make money off of lending.
MSRP or Manufacturer's Suggested Retail Price: This is exactly what it sounds like - a suggested ballpark price for a vehicle based on manufacturer recommendations. Dealerships may use this as a guideline and are open to negotiating higher or lower.

Proof of Income or Proof of Residence: Documentation that you either make as much money as you claim (such as paystubs or tax documents) or that you live where you claim (such as mortgage payments, electricity bills, or anything similar that displays your address). These are often required to complete the vehicle buying and financing process.

Title: A legal document that declares the owner of a vehicle. Titles are often given to the lender as collateral, allowing financial institutions or the dealership to repossess the vehicle if an individual fails to make their payments.

If you have any further questions or confusion, our finance department here at Lee Kinstle GM would be happy to help you through the process.

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