Pretty much every industry has its own lingo, and the auto industry is certainly no exception. If you’re planning to buy a vehicle, you will probably encounter several terms that you may know but might have a different definition than the one you’re familiar with. Our Honda financial services department aims to help with this glossary.
Financing
When you finance a car, you will put up some money to pay for it and then take out a loan for the remainder of what you need.
Down Payment
That initial money you put up is the down payment. The more you can supply, the less you will have to borrow. If you have a trade-in vehicle, this could give you some extra funds to work with.
Principal and Interest Rate
The principal is the total amount of money you will borrow. On top of this number, there will be an additional charge that comes in the form of an interest rate.
Term
The term is the length of your loan. You’ll be able to pick how long you’ll have to pay back the money. It could be as short as 12 months or as long as 84 months. It’s important to remember that the shorter the term, the higher your monthly payments will be. A longer term does result in smaller payments, but you will probably end up spending more money due to the interest.
Get Any of Your Financing Questions Answered at Tom Wood Honda
If you have any questions or concerns about financing, contact Tom Wood Honda near Carmel. You can also get the financing process started right now by filling out and submitting our online pre-approval application.
