Common Financing Terms | Red Wing, MN

 

It can sometimes feel like dealerships and financers are speaking a different language when you're new to car shopping; however, we've compiled a list of some of the most common financing terms around to ensure you know exactly what you're getting when you're financing your new car. From fees to loan terms, we've included the basic things you should know before you sign the papers and get behind the wheel of your new car. If you have any questions, feel free to contact our team at Red Wing Ford


APR

The Annual Percentage Rate (APR) is the yearly rate that's charged as interest for borrowing money. This number represents the actual annual cost of funds over the term or a loan. Therefore, it combines the total amount of interest payable and the cost of fees and other charges.


Blue Book 

Derived from Kelly Blue Book, Inc., this term refers to the value of a vehicle as determined by an uninterested third-party. While technically referring to KBB specifically, the Blue Book value is often used to refer to any third-party company that gauges the value of your car.


Credit Score 

Referring to your creditworthiness, this score or rating represents how much of a risk you are to lenders. It is dictated by your credit history, including the amount of debt you have, how long you've had financing for, and the types of credit you have, among other things.


Destination Charge  

The fee charged to a dealer to deliver the vehicle from the manufacturer. Usually this fee is passed onto the car buyer.


Lien

Ownership of a vehicle by a lender until the full debt is paid. The lender will usually keep the title until you've paid off the loan for your car.


MSRP 

The Manufacturer's Suggested Retail Price, or the recommended selling price based on the vehicle manufacturer (e.g., Ford). It's also called the Sticker Price or List Price.


Pink Slip 

A term used for the vehicle title, this phrase refers to the certificate that shows ownership of the car (though it's not necessarily colored pink nowadays).


Upside-down  

To be upside-down on a loan means you owe more to a lender than the car is worth. This often happens if you're underinsured and get into an accident while still owing money on a car.

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  • Monday 8:30 am - 8:00 pm
  • Tuesday 8:30 am - 8:00 pm
  • Wednesday 8:30 am - 8:00 pm
  • Thursday 8:30 am - 8:00 pm
  • Friday 8:30 am - 6:00 pm
  • Saturday 8:30 am - 5:00 pm
  • Sunday Closed

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Red Wing Ford

3538 Highway 61 West
Directions Red Wing, MN 55066

  • Sales: (877) 467-1021
  • Service: (877) 366-8312
  • Parts: (877) 388-1798
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