Common Finance Terms

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Confused about the process of buying and leasing a car? This quick guides to common auto finance terms should help clear a few things up.

APR: "AnnualPercentage Rate." Similar to an interest rate in that it expresses a cost charged for borrowing money, but it's expressed as a percentage by year. 

Credit: Your credit score and history, which is used by financial institutions to determine which loans you qualify for.

Creditworthiness: The status of being seen as responsible with your debt management and credit accounts, which will increase your credit score. 

Depreciation: A vehicle's gradual decline in value with age. 

Equity: If you owe less money on a vehicle than the total value, you have positive equity

Interest: The amount of money charged over time by a financial institution who has lent an individual money.

Lessee/Lessor: A lessee is the individual leasing a vehicle; a lessor provides the lessee with a vehicle through a lease agreement. 

Lien: The ownership of a vehicle by a financial institution until a loan has been repaid. 

MSRP: "Manufacturer's suggested retail price;" a rough guideline to how much a given vehicle will cost.

Term: The length of time over which a loan must be repaid, or until a lease contract expires. 

If you ever have any questions over your loan or other financing terms, don't hesitate to give us at Sierra Chrysler a call at 888-440-3754. We'd love to help you!

 
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