If you’re a first-time car buyer or just need a financing refresher, take a moment to familiarize yourself with these common auto financing terms you will likely come across in the car buying process. Our helpful finance team at J.B.A. Mitsubishi is always on-hand during the process to explain any parts you might find confusing as well.
APR: APR stands for Annual Percentage Rate, and you’ll hear this one a lot. This is the industry’s fancy way of labeling your interest rate for your car loan.
Down Payment: This is the amount of money you’ll put down out of pocket at the time of signing. The bigger your down payment, the less you’ll need to borrow from a lender.
Gap Insurance: Gap insurance is very important to have when you buy a new car; this covers the difference between what your car’s value has depreciated to and what you still owe on it, in case your car is totaled or stolen.
Lease: You have the option to lease many new cars instead of buying them. Think of a lease as a rental rather than a purchase, allowing you to drive a car for a set number of years and make smaller payments. At the end of the lease term, you’ll simply return it to J.B.A. Mitsubishi.
MSRP: MSRP stands for Manufacturer’s Suggested Retail Price.
Title: This is the legal document stating who owns the vehicle. Until you pay off your car, the lending institution backing your loan will hold onto this.