Car Financing Terms Explained by Kearny Mesa CDJR

Looking for a new or used car? Great. You are sure to find the right model in the lineup at our San Diego, CA Chrysler, Dodge, Jeep®, RAM® dealership. If capability and strength are in order, take a look at a top-selling RAM truck.

If you need to secure RAM Financing or a loan for any vehicle on our lot, the experts at Kearny Mesa Chrysler Dodge Jeep RAM are here to help. If you prefer to lease a vehicle, we can help with that, too.

Whether this is your first or tenth car purchase, there are always financial terms that can be confusing. To make sure you understand your financing agreement, our finance department put together this primer, so you know exactly what you’re signing.

Common Finance Terms Defined

Finance: Borrowing money, either from a bank or other financial institution, to buy your vehicle. Once you’ve paid off the loan, you own the vehicle.

Lease: You pay monthly installments for a portion of the car’s actual cost. You drive the car for a period of time—usually one to three years—and at the end of the lease, you can pay the remainder to keep the car or sign for another lease.

Interest rate: The fee charged by the lender for use of the loan. You’ll see it listed as a percentage rate in your monthly car payment.

Down payment: This is the money you pay upfront for the vehicle, and it is not included in the amount of the loan.

Term: This refers to the length of the loan. A shorter loan term usually means a lower interest rate. So, while your monthly payment might be higher, the overall amount you’ll pay for the car will be lower.

Equity: The difference between the amount of money you owe on the car versus what it’s worth. As you pay off the loan, your equity grows.

If you have any questions about buying or leasing a new or pre-owned car, truck, or SUV, we are happy to answer them. If you’re planning on securing a loan, go ahead and fill out our online finance application to save time. If you plan to trade in your old vehicle, use our convenient value your trade tool so you can factor that into your budget.

Come into our Chrysler Dodge Jeep RAM dealership in San Diego, CA for a test drive. We look forward to helping you find the right vehicle for your lifestyle and budget.