Finance Terms Every Driver Should Know

Even if you intend to pay for a vehicle upfront, it’s still a good idea to familiarize yourself with some common finance terms. That’s because leasing or financing an automobile might end up being more advantageous in the short and long run, something you’ll only be able to recognize if you know some financing lingo.

You can trust the pros in our Cadillac financing center to explain all the relevant terms to you, so you’ll be able to spot the most favorable deal when it’s presented to you.

Interest Rate

If you do a search for “new Cadillac cars near me,” you’ll quickly realize you won’t need to go anywhere but our Cadillac dealership to find a luxury auto that will support your lifestyle seamlessly. Once you choose the premium ride you want to bring home, you might opt to finance your purchase.

Every auto loan has an interest rate. The interest rate is expressed as a percentage, and it represents the annual cost you’ll pay to borrow money to buy an automobile, but it doesn’t account for any fees.

Annual Percentage Rate

Being a Cadillac dealer near Northbrook, IL, it’s important to us that area drivers know that the APR and interest rate are not the same thing. While both are measures of how much you’ll pay annually to borrow money, the APR accounts for the interest rate as well as any fees that are factored into your purchase.

Since APR accounts for those additional fees, it’s a better measure of the true cost you’ll pay to carry your auto loan.

Manufacturer Incentives

Automakers sometimes offer promotions like zero-percent financing on select models for qualified buyers. You can view our current Cadillac lease offers and finance incentives on our website.

MSRP

When you shop with Zeigler Cadillac of Lincolnwood, you’ll often hear someone mention a car’s manufacturer suggested retail price or MSRP. This price represents the amount the Cadillac brand recommends we ask for the related vehicle.

Loan-to-Value Ratio

Similarly, you may also hear discussions about the loan-to-value ratio. Expressed as a percentage, the loan-to-value ratio is the dollar value of your auto loan divided by the actual cash value of the automobile you’re getting. The larger your down payment is, the lower this ratio will be.

Do you have questions about finance terms we didn’t mention? If so, give us a call, reach out to our team online, or visit Zeigler Cadillac of Lincolnwood today.