Walking into a dealership can feel like entering a room where everyone is speaking a different language. To help you feel confident and in control, we’ve defined the most common terms you’ll encounter during your car-buying journey.
: When you owe more on your loan than the car is actually worth. This often happens with long-term loans or small down payments. car buying terms
: The cost of transporting the vehicle from the factory to the dealer. This is usually non-negotiable and passed directly to the buyer. 2. The Loan: Navigating Financing Walking into a dealership can feel like entering
: A letter from a lender (like a credit union or bank) stating they will lend you a specific amount at a set rate. This is powerful leverage when negotiating at the dealer. 3. The Extras: Protection and Trade-ins This often happens with long-term loans or small
: The upfront cash you pay to reduce the amount you need to borrow. Most experts recommend aiming for about 20% of the sale price.
If you aren't paying cash, these terms will determine your long-term costs.
: The amount the dealer offers for your current car to put toward your new one. Check values on sites like Kelley Blue Book before you go.