Common Finance Terms In Twin Falls, ID

Customer signing papers - Rob Green GMC in Twin Falls ID

Dealership Finance Terms Defined

When it comes to buying a new car, your best bet is to do your homework ahead of time and arrive at the dealership prepared. This means having an idea of what you need in a vehicle, as well as what certain finance terms mean to ensure you're never confused. Read on to learn what some common and potentially confusing finance terms really mean, courtesy of Rob Green GMC's finance team.

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Add-On Interest

Add-on interest is figured at the start of a loan term and added to the principal. This means that all of this interest must be paid, even if the loan is paid off in full early.

Kelly Blue Book Price

Technically, this refers to the Kelley Blue Book, a standard industry guide to vehicle pricing. However, this can also sometimes refer to a price found in any number of various guides.

Dealer Incentives

These are programs manufacturers offer to boost sales of slow-selling models. Often this results in dealers passing on savings to buyers.

Destination Charge

This is the fee for transporting a vehicle from the manufacturer to the dealer. This cost is then passed on to the buyer.

Invoice Price

Invoice price refers to how much a manufacturer charges a dealer for a vehicle before rebates or other incentives. This price always includes the destination charge when financing a vehicle.

Prepayment Penalty

A prepayment penalty is a lender's charge to a borrower for fully repaying a loan before the end of the borrowing term.

Rebates

A rebate is a price reduction for a vehicle by the manufacturer that acts as an incentive to buyers. These rebates are often especially appealing to those with low credit or those without a lot of cash for a down payment.

Trade-In Value

This is the amount that a dealership will give you for your vehicle in the form of credit toward the cost of another vehicle. This amount is usually lower than the wholesale value of the vehicle.