Common Finance Terms Defined | Red Wing, MN

Common Finance Terms     

Financing a vehicle can feel daunting-especially if you're unfamiliar with many of the terms. This quick reference guide should help you develop the foundation you need to move forward in auto financing with confidence. If you have any questions, feel free to ask the team at Red Wing CDJR. 


Annual Percentage Rate (APR)

The annual percentage rate on a vehicle is the amount of interest you will pay on what you owe for a vehicle each year. The lending institution sets the amount at the beginning of your auto loan.


Base Rate

The base rate is the lowest starting price of any vehicle before any add-ons. This price usually includes a factory warranty, the destination charge, and all of the standard, base-level features. Other terms for base rate are MSRP (manufacturer's suggested retail price) and sticker price.


Co-Signer

A co-signer is someone who signs the loan agreement along with you, the loan applicant. In this action, the co-signer is agreeing to help you finance the vehicle. If the loan applicant cannot complete the payments on the loan agreement, the co-signer is responsible. 


Credit Score

A credit score is a number that represents your credit history-that is, your financial history, including information about previous loans, debts, and payment histories. Higher credit scores are considered better, and imply that you will be reliable paying off future loans. Thus, a better credit score generally allows you to obtain a better loan deal.  


Guaranteed Auto Protection (GAP) Insurance

GAP insurance coverage will take care of the remainder of a car loan on your vehicle if it is totaled in an accident; so you won't  have to continue to pay on a vehicle you can no longer drive.


Rebate

When a new or used car offers a rebate, that means it comes with a partial refund after purchase.


Refinancing

Refinancing allows you to sign up for a car loan all over again by taking out a new loan to pay off the first one. This is appealing because it can allow you to obtain a better interest rate in the second loan or change lending institutions, saving you money in the process.

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Contact

Red Wing Chrysler Dodge Jeep Ram

3538 Highway 61 W
Directions Red Wing, MN 55066

  • Sales: (651)347-6958
  • Service: (651)347-4146
  • Parts: (651)347-6590
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