Some common terms used in car financing
Written By Fred Patrick
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If you are planning to sell your old car or buy a new one, you should know about some common terminologies used in car financing. These terminologies are listed below:
- Trade – in
If you want to sell your old car and want to buy a new one from the same dealer with the difference of amount, this is called trade-in. In other terms, the value of your old car will be used as a down payment. You can also sell your used car to some another dealer and pay cash for the down payment.
- Down payment
The amount you give to the dealer before the start of installments is termed as “down payment”. According to the experts, it is better to give a higher down payment so that you have to buy less amount and ultimately have to bear less interest.
- Amortization table
This table prepared by the dealer shows the principal amount and the amount of interest separately. Some dealers show this table to the borrowers while others do not. By looking at this table, you will get to know that after every installment, how much amount will be deducted from the principal.
- Term length
Term length is another common term used in auto car financing. It refers to the total time in which the loan amount will be completely cleared. In another way, the installments are spread in this time. This time is usually twenty four to forty eight months in length. If you are financing a used car, the term length is usually lower however; new cars have higher term lengths. Some financial experts say that it is better to go for the car loan with shorter-term length.
There are many other terms used commonly in car financing. One should have good knowledge about these terms before buying a car through financing. Understand the entire process of financing your car and inquire the dealer about every single detail. Buying a car through in-house auto financing Houston TX is simple and convenient. You can book your car online and have a chat with the dealer. Besides this, you can also select your car through buy here pay here car lots. Not only is this, but 2nd chance auto loans are also available for people who do not have a good credit score. A number of online dealers and websites finance cars on easy terms. Start searching now!
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