The world of car buying can be confusing. Which is why during the buying process, terms that sales agents use may put you to a disadvantage. Here’s a little guide we created to help you understand the terms they use.
Just like any other loans, rate or interest rate is the percentage of the borrowed money that is added to the loan amount. The lender, either bank or dealership, dictate the rate and is usually charged annually. The lender’s rate should be discussed with the buyer for transparency.
This is the initial amount that you’ll have to cash out for you to be able to buy your car. It’s a portion, in percentage, of the vehicle’s suggested retail price (SRP). This will depend on the loan provider and the dealers; they usually go as a low as 15% to 20%.
In case of promos, some dealerships give an attractive offer that go as low as zero downpayment. You can find the latest and official promos here in AutoDeal.
It may not look like a contract, but a purchase order (PO) is an agreement between the buyer and dealership to control external transactions. A car dealer won’t release the car without it. You can confirm with your sales agent where your PO will come from, but more likely it will be from the loan provider.
Basically, it’s where the information about the car and accessories bought are listed in. It should contain the car’s model/variant, color, price, accessories and the total amount of the transaction. This is a very important document that you should keep secured – in case you’ll need it in the future.
Principal borrower and co-borrower
The vehicle registration will have the name of the principal borrower on it. He has the primary responsibility in repaying the loan. If the principal borrower’s income and credit history won’t suffice, he can choose to add a co-borrower to his application. His own credit and history will be included in the application but consequently, the responsibility of repaying the loan will be shared by the two.
For OFWs, the dealer or the bank can decide whether the person outside the country can be regarded as the principal borrower.
To protect your new property, you have the option to add comprehensive insurance to your package. It has a wide array of coverage for events that can damage your car such as vandalism and fire. For an an additional fee, there is an option to add Acts of Nature (AON) to your coverage which guarantee of compensation for damages caused by natural calamities.
You may refer to your insurance policy for the complete list of coverage .
Some all-in downpayment promos here in AutoDeal include 1-year comprehensive insurance coverage, which could really give you peace of mind.
With the points mentioned, you’re now more knowledgeable of the terms that car sales agents use when buying. You can start the process of buying your dream car by visiting the AutoDeal Car Guide.