Ed Hicks Nissan is here to guide you through the car financing process. Learn the top 10 auto financing terms you need to know, and apply online for auto loan pre-approval in Corpus Christi.
Navigating car financing can feel like a daunting task, especially for first-time buyers. Here are at Ed Hicks Nissan in Corpus Christi, we want you to feel empowered to make the best choice for you and believe the best choices start with information. Here are some key terms you might encounter as you get started, explained in simple terms to empower you and make the financing process at Ed Hicks Nissan easy and stress-free:
- APR (Annual Percentage Rate):
- What it means: APR is the yearly interest rate you’ll pay on your car loan. It includes both the interest rate and any additional fees or costs.
- Why it matters: A lower APR means you’ll pay less in interest over the life of the loan, saving you money.
- Down Payment:
- What it means: This is the amount of money you pay upfront when you purchase a car, and you may need to save up for it. It’s typically a percentage of the car’s total price. We sell many vehicles under $15k, which don’t require much of a down payment at all.
- Why it matters: A larger down payment can lower your monthly payments and might even get you a better interest rate.
- Loan Term:
- What it means: The loan term is the length of time you have to repay your car loan. It’s usually expressed in months, like 36, 48, or 60 months.
- Why it matters: A longer loan term can mean lower monthly payments, but you’ll pay more in interest over time. A shorter term means higher monthly payments but less interest paid overall.
- Credit Score:
- What it means: Your credit score is a number that represents your creditworthiness. It’s based on your credit history, including your ability to pay back loans.
- Why it matters: A higher credit score can help you get a lower interest rate on your car loan, making your purchase more affordable.
- Trade-In Value:
- What it means: This is the amount you can get for your current vehicle if you trade it in when buying a new one.
- Why it matters: The trade-in value can be applied towards your down payment, reducing the amount you need to finance. Check your trade-in value today!
- Depreciation:
- What it means: Depreciation is the decrease in your car’s value over time. New cars depreciate faster than used ones.
- Why it matters: Knowing about depreciation helps you understand the long-term value of your vehicle.
- Principal:
- What it means: The principal is the original amount of money you borrow to buy your car, excluding interest.
- Why it matters: Paying down the principal reduces the amount on which interest is calculated, lowering the total cost of your loan.
- Equity:
- What it means: Equity is the difference between what your car is worth and what you still owe on your loan.
- Why it matters: Positive equity means your car is worth more than what you owe, which is beneficial if you decide to sell or trade it in.
- Lease:
- What it means: Leasing a car means you’re essentially renting it for a set period, typically 2-3 years, and then returning it at the end of the lease term.
- Why it matters: Leases often have lower monthly payments than loans, but you won’t own the car at the end of the lease. You can, however, purchase a leased vehicle if you really love it. Just ask us how!
- Residual Value:
- What it means: This is the estimated value of the car at the end of a lease term.
- Why it matters: The residual value affects your monthly lease payments and any purchase option at the end of the lease.
At Ed Hicks Nissan in Corpus Christi, we’re committed to making the financing process as smooth and transparent as possible. Our team of experts is here to help you understand these terms and guide you through every step of the way. Feel free to visit us for a test drive, schedule an appointment for personalized financing advice, or learn more about how you can trade in your current vehicle for a great deal. We look forward to helping you drive home in the car of your dreams!
