There have been complaints many times of miscommunication between clients and company staff especially when they start spewing that jargon that makes little sense to an ordinary man.
If it were another time and another business, you probably wouldn’t have cared less. But the problem here is that it is at the most critical stage of your car purchase and you are just trying to thrash a deal. Therefore, you end up signing a deal that you scarcely understand.
All this can be averted next time by learning the five key auto finance terms before hand so that you are not caught off guard by the man across the counter.
Dealer’s sticker price
This simply refers to the public price of the car that you have expressed interest in. This number is the MSRP and is always glued to the windshield of the vehicle in question. Like in most negotiable items, this price is the basis for negotiation from which an agreement is reached. Some consumers; however, can pay the sticker price for the car.
It is also not unusual for buyers to pay more than the sticker price especially when the cars are extremely sought after. Generally, you always have a chance to negotiate a better deal from the sticker’s price.
Annual percentage rate
Commonly abbreviated as APR, this is the rate of interest that is inclusive of all the requisite fees and other charges that come with a loan and it is normally calculated on a yearly basis. Normally, it is tied with the terms of the loan. It could be something like 2.0 per cent for 30 months or 1.8 per cent for 36 months.
Dealer invoice price
This refers to the amount that dealer pays the manufacturers for the vehicle that he or she has decided to purchase for stocking. The dealer’s profit is the difference between this price and what a buyer pays the dealer for a vehicle, after successful negotiations.
A rebate simply refers to a buyer’s gift from the manufacturer or sometimes, a dealer. They are normally exhibited as a reduction on the price of selling the car although it is also possible that they are in terms of an offer for a better financing rate.
This is where a dealer not only offers to sell you a car but also gives you the option of having it financed by them so hat you will pay later.