So, you’ve done it — you’ve decided that you want to purchase a used car. Before you begin the process of purchasing, though, it’s important that you understand the specific terminology that come with buying a used car.
- Equity: If you’re trading in your own vehicle, you might still owe money on it. If the money you owe happens to be less than the trade-in is worth, then you have equity on the vehicle. This equity can likely be applied to the purchase price of your new used vehicle.
- Wholesale Value: Also known as the trade-in value, this term applies to the amount you can expect your trade-in car to receive from a wholesaler or re-seller (a dealership). The wholesale value of your car will vary based on multiple factors.
- Down Payment: When you choose the used car you want to purchase, unless you’re paying for the vehicle entirely in cash, you will likely have to make a down payment. This is a one-time payment made towards the purchase price of your used vehicle, helping to reduce the monthly payment amounts of your loan.
- Finance: If you opt for a loan to purchase your new used vehicle, you will be financing the vehicle. This means a lender will pay for the up-front purchase and you will receive a loan that you’ll repay over time.
To learn more, contact one of our location’s finance department as a part of the Downtown Autogroup. We’ll be happy to walk you through what you need to know to purchase a pre-owned ride.