Nderstanding AR Inancing: U F Y C
Nderstanding AR Inancing: U F Y C
Nderstanding AR Inancing: U F Y C
CAR
FINANCING
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You and the dealer determine the interest rate on your contract. The dealer may earn
additional income when your contract interest rate is higher than the rate the finance
company is willing to accept.
• You may negotiate the interest rate on your contract with the dealer and the
terms for payment, just as you negotiate the price of the car. This negotiation
can occur before or after the dealership accepts and processes your credit application.
• Your dealer may be able to provide special manufacturer offers, such as reduced
interest rates or cash back on certain models. You may see these specials advertised
in your area. Make sure you ask your dealer if there are any special financing
offers or rebates for the model you want to buy.
Truth in Lending Act – requires that, before you sign the contract, creditors give you
written disclosure of important terms of the contract such as APR, total finance charges,
monthly payment amount, payment due dates, total amount being financed, length of
the contract and any charges for late payment.
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For more information on federal credit regulations and consumer rights, contact:
STATE LAWS
Some state laws may provide you with additional rights. For information on these laws,
contact your state’s consumer protection agency or Attorney General’s office (Web sites:
www.naag.org or www.consumerlaw.org ).
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• Don’t sign documents that are blank or are missing information about the terms of your
purchase.
• Don’t drive off the lot in the car you are buying until you’ve completed the financing
process.
Amount Financed –
The dollar amount of the credit that is provided to you.
Assignee –
The bank, finance company, or credit union that purchases a contract from the dealer.
Credit Insurance –
Insurance that pays the scheduled unpaid balance if you die or scheduled monthly
payments if you become disabled. As with most contract terms, the cost of optional credit
insurance must be disclosed in writing, and, if you want it, you must agree to it and sign
for it. This insurance is not required.
Down Payment –
An initial amount paid to reduce the amount financed.
Finance Charge –
The cost of credit stated as a dollar amount.
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