It’s a good idea to get familiar with common finance terms before buying a new (or used) car. The process itself is already complicated enough as it is without having to deal with words being tossed around that you may not have heard before. Here at Pantili Mitsubishi, we're happy to explain any unfamiliar terms, and answer any questions you may have about financing your new or used Mitsubishi vehicle.
To make things a bit simpler, here are 8 common finance terms you should know about.
Amortization- The paying off of debt with a fixed repayment schedule in regular installments over a period of time.
Comprehensive Insurance- Insurance that protects you against damages to your car not related to a collision, such as theft, vandalism, fire, natural disasters, and more.
Dealer Invoice- The price the dealer pays the manufacturer when it receives a car from the factory.
Down Payment- The upfront payment made when buying a car on credit. The higher the down payment, the lower the monthly cost.
Early Termination Fee- The charge you must pay when terminating or canceling a contract early, like when returning a leased vehicle before the lease period is over.
Fair Market Value- The agreed price of a vehicle when both the buying and selling parties are reasonably knowledgeable about the vehicle and behaving in their own best interests without feeling pressure to either sell or buy.
Maturity Date- The deadline by which your loan must be paid in full.
Trade-In-The act of selling a vehicle you own as part of purchasing a new one. The dealer will offer you a certain amount for your vehicle that you can use toward your down payment.