Car Financing Terms

Front

Annual Percentage Rate (APR)

Back

The interest rate on a loan, charged annually for borrowing money. A lower APR means less cost to borrow.

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Depreciation

Back

The reduction in value of a car over time due to wear and tear.

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Down Payment

Back

The upfront money paid to the bank when getting a car loan.

Front

Make

Back

The brand or company that made the car, such as Ford, Honda, or Toyota.

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Manufacturer

Back

The company that built the vehicle, like Ford, General Motors, or Volkswagen.

Front

Miles Per Gallon

Back

A measure of how far a car can travel using one gallon of gas, indicating car efficiency.

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Model

Back

A specific vehicle name within a make, like Ford Mustang or Toyota Corolla.

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MSRP

Back

Manufacturer’s Suggested Retail Price, the starting point in car dealership negotiations. It does not include registration, taxes, destination charges or other fees.

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Principal

Back

The amount of your monthly car payment that goes towards paying off the loan after interest.

Front

True Market Value

Back

The car price including fees and charges, often not in the advertised price.