Chevrolet Financing Terms for Beginners
If you're applying for Chevrolet financing for the first time, you're in the right place. This quick guide from us at Shea Chevrolet will get you up to speed on all of the common loan terms you'll need to know. Check these definitions before you stop by our financing department and shop with even more confidence at our dealership.
Down Payment
Your down payment consists of all of the money you pay when you sign your Chevy lease. This includes any payment you make by check, any value from any Chevy trade-in vehicle, and any cash rebates you qualify for at our dealership. Generally, you should put at least 20 percent down on a new car and 10 percent down on a used Chevy car.
Annual Percentage Rate (APR)
The interest rate is a good place to start comparing financing offers, but these rates don't include additional costs like fees. For a more accurate guide when comparing offers, check the Annual Percentage Rate. The APR includes additional costs like loan origination fees, so they're more representative of what your actual costs will be.
Principal
When you take on a car loan, you are borrowing enough money to cover the cost of your new Chevrolet car, minus any down payment you made. This amount is the principal, and it's important to distinguish this from the total cost of the car. The total cost will include both any interest payments made over the course of the loan and any down payment.
Amortization
Your monthly payment may stay the same throughout your loan, but what that money is going towards shifts over time. Your first loan payments mostly go towards paying off interest, but that ratio lowers over the course of your loan. By the end of your loan, you'll mostly be paying off the principal.
Gap Insurance
Sometimes, after an accident or a theft, your insurance company won't pay you enough to pay off the remaining cost of your loan. Gap insurance "fills the gap" in this situation, covering the difference between the two numbers. If you made a small down payment, rolled in an upside-down loan, or have a long loan term, you may want to consider gap insurance.
Find Chevrolet Financing Support in Flint, MI
If you still have questions, stop by our finance department. Explore the expansive showroom at our Chevy dealership in Flint, MI, and find your next favorite way to get around town. We'll get you behind the wheel in no time, so come by today!