Auto Financing 101 | White Allen Chevrolet | Dayton, OH 

Before you head to the dealership to buy or lease a car, you should know some of the most common finance terms you're likely to hear. Here's a quick list.

APR - Annual Percentage Rate. If you take out a loan to buy a car, you have to pay it back with interest. The APR is how much it costs you to borrow the money each year.

Co-Signer - A person who pledges to pay back the loan if you fail to do so. Typically required if you have low credit history or a low credit score.

Credit Score - A representation of how risky you seem to lenders. The higher it is, the more likely you are to be approved for a loan with a low interest rate. You can raise your credit score by paying bills on time and responsibly maintaining debt.

Down Payment - The payment you make up front when financing a car. The higher the down payment, the less you need to finance - and thus the more you save on interest.

Maturity Date - The date by which you must pay your loan in full.

Manufacturer Incentives - Special deals (like 0% financing or cash rebates) that may help you save money on the purchase of a car.

MSRP - Manufacturer's Suggested Retail Price. This price does not include any options or items added at the dealership.

Negative Equity - If the value of your car drops rapidly after purchase, it may be worth less than you owe. This is also known as being "upside down" on your loan.

Term - The duration of the loan in months.

Trade-In Allowance - When you trade in another vehicle, the trade-in allowance is the value of the old vehicle used toward lowering the purchase price of the new one.

If you have more questions about finance terms, don't hesitate to call our finance department or visit White Allen Chevrolet in Dayton, Ohio!

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