Subaru Financing Glossary: Common Terms Explained
The more you know about the Subaru financing process, the more comfortable and confident you'll feel when the time comes to pick out your next vehicle. Jensen Subaru is the dealership you can trust for financing support and more. We're here to match you with the perfect vehicle for every adventure to come, at the right budget to fit your lifestyle and driving needs. Learn about common financing terms before you begin shopping.
Down Payment
The down payment is the amount of money you give to the dealership on the day of purchase. The more money you are able to "put down," the more you'll save on monthly payments and accrued interest costs. A good recommendation is to put down at least 20 percent of the value of your new Subaru vehicle when you buy.
Principal
The principal refers to the amount of money you have borrowed for your vehicle-excluding interest rate or any fees. When repaying your loan, putting extra money toward the principal reduces the total interest you pay and helps you own your vehicle sooner.
GAP Insurance
When you lease a vehicle, it's typically required to take out GAP insurance. GAP insurance stands for Guaranteed Asset Protection insurance. It covers the difference between the vehicle's value and what you owe on the vehicle, in the event it is totaled or stolen. This protects both the driver and the lender.
Equity
The equity of a vehicle is the difference between what you owe on the car and its market value. You always want to keep this number over zero, especially if you are considering a Subaru trade-in in the future. When you owe more than the vehicle is worth, that's referred to as negative equity or being upside down or underwater.
Annual Percentage Rate (APR)
The annual percentage rate, or APR, is the cost of borrowing money every year, and includes both the interest rate and lender fees and costs. Fixed APRs will stay the same, where variable rate auto loan APRs can be subject to change. When deciding on which loan terms are right for you, you'll want to be sure to budget around this figure.
Begin the Subaru Financing Process in Sioux City, IA
Picking out the perfect vehicle should be a fun and stress-free process. That's why our team at Jensen Subaru works hard to make the financing easy, so you can focus on the road ahead. Visit our Sioux City, IA, Subaru dealership to get started.
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Jensen Subaru
3909 Stadium Dr
Sioux City, IA 51106
- Sales: 712-255-3000
