Common Auto Finance Terms | Cumming GA
Common Auto Finance Terms in Cumming, GA
We know that the least exciting step of buying a new car is the final one: financing. However, the finance team here at Genesis of Cumming strives to make the process as simple as possible for all of our customers. One of the ways you can prepare for this process is to familiarize yourself with common finance terms that you'll probably hear when you step into our finance office. You may know most of these terms already, but if you're new to the finance process or just need a reminder, we've provided a list of common finance terms for you to reference below.
Financing is when you pay for your new vehicle over time, rather than paying the full amount right away. You will take out a loan and pay it back over a period of time with interest.
When you choose to finance your vehicle, you will be charged interest, which is the cost for borrowing money. You will pay the interest as part of your monthly car payments.
Leasing is when you pay to drive a new car for a specified amount of time (usually 2-3 years) without owning it. When the lease is over, you may choose to purchase the vehicle or simply return it to the dealership.
Term refers to the length of time you have to pay off your loan or the duration of your lease.
Principal refers to the amount of the loan that you are paying off, not including interest or other fees.
A down payment is the initial amount of money that you pay when you finance or lease your vehicle. This amount will vary, depending on your financial situation and other factors, but the larger the down payment you make, the less you'll have to pay off.
Sometimes you will see offers for cash back from the manufacturer on certain vehicles. This is a kind of rebate that you may be able to use towards the down payment of your car or receive as a check.
All cars experience depreciation. This is the gradual loss of a vehicle's original value, and it starts when the vehicle is purchased.
Equity is the difference between your vehicle's value and how much you still have to pay off. Let's say your vehicle is worth $20,000 and you still owe $5,000 on it. Your equity is then $15,000.
Upside down is a situation you want to avoid, in which you owe more on your vehicle than what it's worth. This also means you have negative equity.
If you have questions about our finance process or want to learn more about these finance terms, please let us know. Give us a call, contact us online or stop by Genesis of Cumming at 750 Peachtree Parkway, Cumming, GA 30041, near Alpharetta, Johns Creek and Atlanta. We look forward to working with you.
