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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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A locally owned and operated financial institution, commonly called a community bank.
- Index
A table showing the yields or interest rates on certain classes of debt. The prime rate is the most common such index, but there are many others. Indexes are commonly used to set the interest rates on adjustable-rate mortgages, home equity lines of credit and variable credit cards.
- Indexed rate
On variable loans, it's the index plus some set margin. If your home equity rate, for example is prime plus 1 and the prime rate is 7.5 percent, your indexed rate is 8.5 percent.
- Insurance
An agreement under which one party agrees to compensate another for specified damages. The insurer takes on the risk that it will have to make a large payment in exchange for a series of small payments by the insured. Required in many cases before a lender will offer money for a car or home.
- Insurance identification card
This wallet-sized card is issued by an insurance company. Shows the policy holder's name, policy number. Under state laws, must be carried and shown to law enforcement at traffic stops.
- Interest
In financial terms, interest is the fee charged for the use of someone else's money.
- Interest rate
The rate charged for the use of money, most often expressed as an annualized figure. In consumer loans, it's the rate charged to consumers who want to borrow. In deposits, it's the rate offered by an institution that wants to use consumers' money.
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| National
auto loan rates |
| 11/21/2009 6:19:12 AM
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