Maryland Car Loan Terms

If you are thinking about purchasing a new car or refinancing your current car loan it would be a good idea for you to learn the vocabulary used in the process. This will help you to be confident in what you are doing and choose a Maryland car loan that is right for you.

Not only will learning about Maryland car loan terms help you understand car financing it will also help you to understand how the dealers come up with the pricing of their cars. This will in turn help you when it comes down to negotiating an acceptable price.

The first Maryland car loan term you may come across will be the finance amount. This is the total amount you are paying for the car. It includes the price of the car, the interest rate and any other additional fees or taxes. This amount can be lowered by the amount of your down payment.

Next there's the Annual Percentage Rate or the APR. This is the yearly amount of money you are paying a Maryland car loan lender to loan you the money for your car.

You may come across the term Dealer Charges. This term refers to the cost of any added warranties sold to you by the dealership and can be added into your Maryland car loan. A Dealer Invoice shows the amount of money the dealership is charged by the manufacturer for the vehicle. There's also the destination charge the dealership has to pay the manufacturer. This is an amount to cover the delivery of the vehicle from the manufacturer to the dealership and should be added to the total amount the dealership had to pay to the manufacturer. This charge is usually passed onto the buyer.

There's also the Manufacturer's Suggested Retail Price. This is the amount the manufacturer suggests the car dealership charge for the car and any additions to the car. There may come a time when you come cross a Factory-to-Dealer discount. This is a discount given to make the slow selling cars so that they will sell as quickly as the manufacturer would like.

As with any business, a car dealership would like to make a profit off of the cars they sell. The term mark-up is used to refer to this profit. This is the extra amount of money added onto the Suggested Retail Price. It is also the number you would like to make as low as possible.