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Common Auto Finance Terms
Common Finance Terms Explained in Opelousas, LA
Even if it’s your first time buying a car, you’ll find the financing process easy here at Giles Nissan Opelousas. Our friendly team will work hard to find the right lease or loan terms for you, keeping you fully informed along the way. There’s no need to feel intimidated — we’re here to help, and we want you to feel confident as you sit down in our finance department to sign on the dotted line for your new Nissan or used car. That’s why we’ve compiled a list of common finance terms below that you may hear when you visit us. Take a look to familiarize yourself with them, and be sure to let us know if you have any questions!
Financing
Financing a vehicle allows you to pay for it over several years rather than buying it outright with cash at the dealership. You’ll borrow money and pay off your loan with monthly payments, and then you’ll own the car in full.
Leasing
Leasing is like renting a car, except for a much longer period of time (usually 24-36 months). You’ll agree to lease terms, make monthly payments and then either return the vehicle or buy it at the end of the lease.
Term
A term is the length of time a loan or lease lasts.
Principal
The principal of a loan is the amount you’re paying off without interest included.
Down Payment
You’ll make a down payment on your purchase or lease at signing. This is an amount of money you pay upfront that lessens the amount you’ll have to pay over time. The total down payment you’ll make will depend on your credit, your cash in hand and the terms of your lease or loan.
Interest
A lender charges an amount of money called interest as the fee for borrowing money.
Cash Back
Auto manufacturers offer cash back as an incentive to encourage buyers to purchase new cars. You may hear of cash back referred to as a rebate. Cash back can be used toward your down payment if you’d like, or you can get a check in the mail for the amount later.
Trade-in
Trading in your current car is a great way to lessen the cost of your new or used vehicle purchase. Find the value of your vehicle on our website today!
Depreciation
Depreciation refers to a vehicle’s loss of value over time. This process starts as you drive off the lot in your new car and continues as long as the vehicle is being driven.
Equity
The difference between how much your car is worth and how much you owe on it is your equity. For example, if your car is worth $10,000 and you owe $2,000 on it, you have $8,000 in equity.
Upside Down
When you’re upside down on your auto loan, you owe more on the car than it is worth. This is also called negative equity. For example, if your car is worth $5,000 and you owe $10,000 on it, you’re upside down on your loan.
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, contact us online or stop by Giles Nissan Opelousas at 4383 I-49 South Service Road, Opelousas, LA 70570, near Carencro, Eunice, Port Barre and Central Louisiana. We look forward to chatting with you!
