FINANCE TERMS AT HIGHT CHEVROLET BUICK GMC

There's a lot to love about shopping for a new car: test drives, new-car smells, the thrill of the hunt. But the part no one loves about car shopping is thinking about how to pay for it. While this stage of the process can't be overlooked, it doesn't need to be stressful if you go into it well-informed and confident. We'll help you become a little more of both by defining some common finance terms. 

One of the most important - and often most feared - financing terms is "Credit Score." A credit score is a numerical representation of how likely you are to repay any debt you may accrue. Scores range from 300 to 850 and the goal is to have as high a score as possible. Your score is based on payments you've made over time and how many credit accounts you have that are in good standing. Your credit score is very significant when you finance a car because it determines what type of interest rate you will be eligible for. A sales representative will run a credit report when you sit down to finance your new car, and from there he or she will offer you terms. It's a good idea to know what your credit score is before you initiate the finance process - you can find yours out via your bank or through a free credit score service like Credit Karma.  

Your credit score determines what type of rate you will be eligible for, but what is an interest rate? Interest rate is essentially the fee charged to you by whatever financial institution you are borrowing from. It's written as a percentage of the total amount lent. Borrowers with better credit are eligible for lower interest rates (i.e. a lower fee paid to the lender) because they are seen as less risky loans.  

This is the amount you owe on the vehicle before interest is factored in.  

This is how much you pay at the point of sale. If a car costs $20,000 and you put down $5,000 on the day of the sale, you will then finance the remaining $15,000.  

Don't be intimidated by the financing terms thrown around when buying a car. At Hight Chevrolet Buick GMC, our experienced financing professionals will guide you through the process using easy-to-understand language.