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Finance Terms to Know
Sometimes, shopping for a new car, whether you are buying or leasing, can be intimidating because of all the fancy financial terms used by dealerships to negotiate, lease, and sell vehicles. It can seem like you need to learn an entirely new language in order to communicate effectively. Don't worry – here's a basic list of terminology that can help you to better understand to car-buying or leasing process.
  • Black Book​ -​ This is the value of a vehicle as determined by data collected from wholesale car auctions. It is similar to Blue Book.
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  • Blue Book Value​ - This is the value of a vehicle as determined by Kelley Blue Book.
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  • Credit​ - A financial way to look at your ability to repay a loan. It considers information such as your length of credit, type of credit, and debt-to-income ratio.
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  • Depreciation​ - The gradual decline in a vehicle’s value over time. This slows down the older a car gets.
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  • Down Payment​ - The money you pay up front when you purchase a car to lower the total amount financed.
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  • Finance Charge​ - The total amount of interest you will be charged over the life of a loan.
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  • List Price​ - This is the price the vehicle manufacturer recommends a dealer place for a new car. It is also called MSRP or sticker price.
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  • Monroney Sticker​ -​ The price sticker on all new vehicle that includes all the vehicle’s options. It is required by federal law.
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  • Pink Slip​ - Also known as the vehicle title or certification.
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  • Principal​ - The total amount owed on a loan, excluding interest.
- + Disclaimers