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Auto loan glossary
Was it the gleam of the chrome on that shiny new car that dazzled you? Or the bright cheery smile and baffling terms tossed around by the car salesperson? Before you sign a loan or lease contract for a car, know what you're getting into with our glossary of terms about auto loans and leasing. Bookmark this glossary so you'll always have a quick reference at hand. |
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- Add-ons
In the automotive world, a synonym for options.
- Additional principal payment
If you want to pay off a loan early, an additional principal payment is the way to do it. In amortized loans, such as most mortgages and auto loans, most of the early payments go toward principal. Making at least one extra payment a year can cut the length of a loan by as much as a quarter and sharply reduce the total interest paid.
- Adjuster
One who evaluates sets the value of an insurance claim.
- Agent (insurance)
Someone who sells insurance policies.
- Amortization
The process of paying a debt in segments over a set period of time, with a portion of each payment going toward principal, a portion toward interest.
- Amortization schedule
In a lease, it's the amount you have to pay before you can drive away. Includes your deposit, and title and registration fees.
- Amount due at lease signing
In a lease, it's the amount you have to pay before you can drive away. Includes your deposit, and title and registration fees.
- Amount financed
The amount you're borrowing. If you're upside down in one car loan and owe more than the car is worth, the difference still owed on the old car might be rolled into the new loan.
- Annual percentage rate (APR)
The APR of loans is calculated in a standardized way that takes fees into account, making it easier to compare loans.
- Application
You fill out this document when taking out a loan so that a lender can check your credit and decide whether to give you the loan, and at what rate. In most cases, you will be required to give your Social Security number and approve a credit check for the process to go forward.
- Appreciation
When an asset increases in value over time.
- APR
The APR of loans is calculated in a standardized way that takes fees into account, making it easier to compare loans.
- Arbitration
An attempt to resolve a dispute using a neutral third party. By making arbitration a condition of the loan contract, many lenders impose arbitration on consumers.
- As-is condition
A warning from seller to buyer that a home or car or other item is sold in its current state, without warranty.
- Asking price
What the buyer wants the seller to pay. Often subject to negotiation.
- Auto insurance score
A type of credit score that auto insurance companies take into account when setting policy costs. Based on the theory, hotly contested by consumer groups, that someone who has trouble paying bills is more likely to make an insurance claim.
- Automatic payment
When consumers agree to allow a lender to deduct the monthly loan payment directly from a specified bank account. Because computer programs are more reliable than human bill-payers, lenders often offer a slight discount to borrowers who agree to automatic payments.
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| National
auto loan rates |
| 11/7/2009 4:56:47 AM
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