If you’ve been trying to find a new car near Port Lavaca or the greater Victoria, TX, area, it’s easy to become overwhelmed with industry jargon and a seemingly endless series of acronyms. That’s why we put together this quick guide to some of the common auto finance terms you’re likely to run into during your search.

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Auto Loan

A car or auto loan is the sum that you borrow from a lender to pay for a new vehicle, so you don’t have to pay for the full cost of a new model in cash. You can secure a loan from your personal financial institution or trust the experts at a dealership like Atzenhoffer to find you a favorable deal. Regardless, you’ll be responsible for making monthly payments until you own your vehicle outright.

Down Payment

The down payment is the amount of money you pay upfront before assuming the responsibility of monthly installments. Typically, your down payment will be a percentage of the total cost of the vehicle you want to buy. The more money you put down, the lower your loan payments will be.

Interest

Interest is the cost of borrowing money. When a financial institution lends you funds to buy a vehicle, it expects a return on its investment. Generally speaking, interest rates are calculated based on the amount you owe and the total value of your purchase. The faster you can pay off your loan — or the shorter your term is — the less you will end up paying in interest.

Credit Score

Your credit score is a number that tells financial institutions how likely you are to pay back the full sum of money you owe them on a loan. Promptness in payments, the type of purchases you use credit for, and how long you’ve maintained certain behaviors — either positive or negative — can raise or lower your credit. Generally speaking, a lower score means you’re likely to see higher interest rates and less favorable terms overall. However, dealerships like Atzenhoffer will gladly help you get behind the vehicle of your dreams, even if you have less-than-ideal credit.

To learn more about auto financing in Victoria, TX, feel free to reach out to the expert staff at Atzenhoffer.