shopping for your car
Car Financing Terminology
Before you apply for and sign a car loan, it's important to understand and review key financing terms. Which of these should be included in the sales contract?
- The amount of money you're borrowing
- The payment amount and the number of payments
- The annual percentage rate or "APR"
The sales contract is legally required to include ALL these items, because each affects the total amount you'll pay for a car. The lower your payment and the longer time you finance the loan, the more you will end up paying in interest. The interest rate likewise influences the cost of your purchase. During your review, check the finance charges. This is what it's costing you to get the loan. Also see if penalty fees apply if you make late payments or pay off the loan before it's due.