![]() Dealers generally don't disclose this bump, so do your homework on the actual rate being offered by the manufacturer or finance company and negotiate to reduce or eliminate the bump. Although many fees associated with a lease are negotiable, this one is generally unavoidable.īalloon Payment/Balloon Loan: A loan that pays off only a portion of a vehicle during its term and demands a large sum-the “balloon”-to be paid at the end of the loan.īump: The difference between the rate a dealer pays for financing on a loan or a lease (called the Buy Rate) and the rate at which they sell the financing to you (the Sell Rate)-typically around one percent. The volume of unfamiliar terminology is one of the things that makes buying a car so stressful for many people, so we’ve compiled the following glossary to prepare shoppers for some of the terminology they will face at the dealership.Īnnual Percentage Rate (APR): Also called a finance rate, this is the interest rate on a loan a percentage of the amount borrowed that a lender charges annually for the use of its money.Īcquisition Fee: A fee charged by the dealer for initiating a lease ostensibly covers the costs of processing the lease-credit reports and insurance verification, for example-but is in actuality pure profit. and you might swear the salespeople are speaking a foreign tongue. ![]() The spread of English as a global language has made international travel increasingly easy for Americans, but walk into any car dealership in the U.S. ![]()
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