Car Buying Glossary | VyStar Credit Union

Amount owed on trade: Total loan balance still outstanding on the trade in.

Buyers Order: A purchase agreement between the dealer and the consumer. This should reflect the buyer’s details, VIN #, details of the selling price, rebate, taxes, processing fee, the purchase date and down payment.

Cash down: Total amount of cash used in a purchase. The larger your cash down payment is, the smaller the loan amount will be.

Credit score: A numerical score that reflects the credit risk you present based on the information contained in your credit file. The better your history of credit, the higher your score.

Credit application: The information a buyer submits when applying for a loan. At VyStar, this can be done in person, over the phone or electronically via Internet Banking.

Credit union financing: The interest rate you may be able to receive on an auto loan from a credit union. This sometimes may be higher than dealer financing, but is often very competitive when used in combination with a dealer incentive or manufacturer rebate.

Credit worthiness: The ability of a consumer to satisfy their credit obligations.

Dealer financing: The incentive interest rate you may be able to receive from an auto manufacturer. These rates can be below standard auto loan interest rates. Most manufacturers allow you to choose either dealer financing or a manufacturer rebate, but not both.

Dealer incentives: Special offers from car manufacturers to their dealers, which are usually passed on to the customer, to encourage sales in a slow market or when excess inventory builds up.

Down payment: An amount paid at the time of purchase that reduces the amount financed. This can include cash, rebate and trade equity.

Extended warranty: Also known as a “service contract,” it is an agreement to cover certain specific service and repairs beyond the life of the factory warranty.

Financing term: Number of months for your auto loan. VyStar offers flexible terms to get your payments where they need to be.

Gap coverage: Protection that covers the difference between a vehicle’s depreciated value in a loan and the amount owed on it in case it is stolen or totaled, a difference the borrower would otherwise have to pay the lender.

Manufacturer rebate: A cash rebate paid by the auto manufacturer to you when you purchase a new vehicle. As stated above, [where is this stated above?] most manufacturers allow you to choose either low-interest, dealer financing or a manufacturer rebate, but not both. Having a VyStar pre-approved loan will allow you more time to negotiate and take advantage of dealer incentives and manufacturer rebates.

MSRP: Acronym for Manufacturer’s Suggested Retail Price.

NADA: The National Automobile Dealers Association is an American trade organization that provide vehicle values.

Sales tax rate: Sales tax percentage rate charged on this purchase.

Total purchase price (before tax): This is the total cost of your auto purchase, excluding sales tax. Includes the cost of the vehicle, any additional options and any destination charges. Sales tax will be calculated and included in your total after tax price.

Trade allowance (trade-in value): The total amount that you are given for any automobile that you trade in as part of the purchase. In some states, a trade-in can also reduce the amount of sales tax you will owe.

Zero percent: No-interest loans advertised by auto dealers. Most 0% financing is short term, payments can be high and generally have higher standards for credit qualification.. They can also come with fees and restrictive conditions. With a VyStar auto loan, you can purchase the vehicle you want and not be forced to buy only the vehicles that qualify for dealer financing specials. Plus, our competitive rates combined with a dealer incentive or manufacturer rebate may be able to save you more in the long-run.