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DEFINITIONS
Interest Rate:
The periodic charge, expressed as a percentage, for the use of credit.
Loan Term:
The length of time that it will take to repay the loan. Typical loan terms are 12, 24, 36, 48 or 60 months.
Term length has a larger impact on the monthly payment and the final amount repaid than interest rates. Some manufactures may offer 0% interest, which may only have a term length of 24 months.
Purchase price:
The amount of money agreed upon by both parties as the value of the item for sale. Negotiation can cause this figure to be different from the Manufacturer's Suggested Retail Price (MSRP).
Another factor that can lower the purchase price of a car, are manufactures credits and rebates. Its always a good idea to ask if any apply before negotiating.
Some dealers that use a one price or non-negotiating system, usually include all rebates from manufacturer to stay competitive.
Down Payment:
The upfront cash payment that the buyer makes to reduce the amount borrowed to purchase a car; the difference between the loan amount and the purchase price. A trade-in allowance and/or rebate also
may be used as down payment. The down payment helps protect the bank, credit union or finance company in case the borrower defaults on the loan. A typical down payment is about 20 percent of the vehicles sale price.
Trade-in Value:
The amount a dealership credits you for the used vehicle you provide as partial payment for another vehicle.
Your trade-in will reduce the taxes on the final price. In BC you are only taxed on the difference from the purchase price less trade-in Value. Both GST and PST is taxed on the difference..
Vehicle Registration Fee:
A fee charged by ICBC to legally register the vehicle in the province. The registration fee in BC is $35.00
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