When you are looking for a vehicle to buy or lease from a dealer, you should be aware of the following auto financing terminologies:
- Charge-Off – Happens when the borrower has been late for a long period of time, the creditor considers the loan uncollectible. To recoup their losses, the lender will try to repossess their vehicle at this point.
- Collateral Protection Insurance – when the consumer does not have an auto insurance, the insurance policy protects the lender from financial losses from having to pay claims. Lenders can require borrowers to buy comprehensive and collision insurance by legally ordering them to do so, or by adding the premiums to their monthly payments.
- Credit Rating Agency – It is a firm that assesses customer’s ability to pay back debt or car loan granted to them. A report from the credit rating agency will be used by the dealership to decide whether to give the client a loan and how much they qualify for.
Categories:
Finance