Auto Finance Terms That You Need To Be Aware Of

If you are in the market for a new or used vehicle, there are many finance terms that you will need to be familiar with. For instance, the term down payment refers to the amount that you will pay at the time of the purchase. In many cases, the trade allowance is considered to be the down payment.

The trade allowance is the amount that a dealer gives you for your current vehicle. Of course, using a trade as a down payment only works if you have positive equity. You have positive equity in your vehicle if its value exceeds what you currently owe on an auto loan.

If the car is worth less than what you owe to a lender, the vehicle has negative equity. The folks at Johnson Sewell Lincoln may be able to help explain these and other relevant auto finance terms to you.



Categories: Finance