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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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- Balloon loan
Unlike an amortized loan, which pays off the principal completely at the end of the loan, a balloon loan leaves a large amount of principal unpaid. Usually, consumers refinance the balloon amount.
- Balloon payment
The large payment left at the end of a balloon loan.
- Bank
An institution, chartered by the federal or state governments and usually regulated by both, that accepts deposits and lends money to borrowers.
- Banker's year
For the purposes of figuring loan payments, bankers divide the year into 12 equal months of 30 days each. The banker's year is why you owe the same monthly payment on your car loan in February and March, even though the months have a different number of days.
- Base price
The price of a car with no options added in.
- Basis point
One one-hundredth of a percentage point. If you see a loan has changed from 7 percent to 7.10 percent, it has gone up 10 basis points.
- Bill of sale
The document that sets out the terms of a property transfer.
- Bill presentment
In online bill-payment systems, it is the method that allows consumers to view and pay bills on a computer.
- Binder
A temporary insurance policy. A binder will cover consumers until a permanent policy can be arranged.
- Blue Book
An industry guide book used to estimate retail and wholesale prices. Originally refers to the Kelly Blue Book, but is sometimes used generically to refer to any of the price guides.
- Bodily injury liability
An auto insurance policy clause that pays for injuries caused by the insured to passengers, other drivers or pedestrians.
- Borrower
A person who gets a loan.
- Breach of contract
The violation of a legal agreement.
- Buyer's market
When there are more sellers than buyers. A condition favorable to the buyers, because it drives prices down.
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auto loan rates |
| 11/21/2009 6:40:11 AM
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