So you want to buy a car, but figuring out all the lingo can be like learning a second language. Here's a quick glossary to get you back up on your feet and ready to go shopping.
Amount Financed: The amount of credit given to you.
APR: Annual Percentage Rate; a percentage representing the cost of credit.
Down Payment: An amount of money or trade equity that you apply to your purchase upon buying.
Equity: Your trade payoff balance minus its value; can be a positive or negative number.
Finance Charge: Total amount used when paying credit.
Retail Installment Contract: An agreement that allows you to make a payment over time, in the form of a fixed monthly amount and rate.
Simple Interest: Interest that accrues using a calculation based on the amount of days between payments, APR, and the remaining unpaid balance.
Stipulation: Any additional documents or actions required to complete a transaction; for example, proof of income can be a stipulation.
Term: The amount of monthly payments used by the consumer to pay off a car loan as per the retail installment contract.
Total of Amounts: The total dollar amount paid by the consumer after completing all payments within a term.
Total Sales Price: Total cost on credit of the purchase; includes amount financed, down payments, and finance charge.