An Actual Cash Value (ACV) is the value of the car according to widely recognized independent sources such as the National Automobile Dealers Association
In an amortizing loan, for each of your monthly payments, a portion is applied towards the amount of the loan – the principal – and a portion of the payment is applied towards paying the finance charge – the interest.
The Annual Percentage Rate (APR) is the cost you pay each year to borrow money, including fees, expressed as a percentage. The APR is a broader measure of the cost to you of borrowing money since it reflects not only the interest rate but also the fees that you have to pay to get the loan. The higher the APR, the more you’ll pay over the life of the loan.
An auto loan’s APR and interest rate are two of the most important measures of the price you pay for borrowing money. The federal Truth in Lending Act (TILA) requires lenders to give you specific disclosures about important terms, including the APR, before you are legally obligated on the loan. Since all lenders must provide the APR, you can use the APR to compare auto loans. Just make sure that you are comparing APRs to APRs and not to interest rates
An assignee is a person or a company who buys your auto loan. For example, an auto dealer who extends credit to you may sell your loan to a bank, making the bank the assignee. You owe the money to whoever has purchased your loan. The assignee has a lien on the vehicle and can repossess if you don’t pay.
A buy rate is the interest rate that a potential lender quotes to your dealer when you apply for dealer-arranged financing.
This can be a benefit both to you and your lender. A co-signer takes full responsibility to pay back the loan. Having a co-signer on your loan gives your lender additional assurance that the loan will be repaid. If you do not repay your loan, your co-signer will be liable for repayment even if the co-signer never drove your vehicle. If you’ve been asked to co-sign a loan, you should consider how it will impact your finances.
If you are considering credit insurance, make sure you understand the terms of the policy being offered. If you decide you need insurance, there may be cheaper ways for you to obtain coverage than to buy credit insurance and add it to your auto loan. For example, life insurance may be less expensive than credit life insurance and allow your family to pay off other expenses in addition to your auto loan.
Some auto dealers as well as banks and credit unions offer “debt cancellation” and “debt suspension” products or insurance under various names. These products are similar to credit insurance in terms of their function, but fees and other features may be different.
If your vehicle is repossessed and sold, you may be responsible for paying the difference between the amount left on your loan (plus repossession fees) and the sale price. This is known as a “deficiency balance.”
A down payment is an initial, upfront payment you make http://paydayloansohio.net/cities/fremont toward the total cost of the vehicle. Your down payment could be cash, the value of a trade-in, or both. The more you put down, the less you need to borrow. A larger down payment may also reduce your monthly payment and your total cost of financing.