Finance Terms Glossary

There are many terms and acronyms associated with buying a new or used vehicle, which buyers may not be familiar with. However, with this glossary, even a novice walking into Twin Falls Chevrolet will feel confident and sound like an expert. 

When buying at Twin Falls Chevy, you may hear some of the terms below to describe various specials and offers specific to Chevrolet vehicles. 

Customer Loyalty – When buying or leasing a Chevy, you may hear this term if you are trading in your current Chevrolet for another. If you are a current Chevrolet customer, sometimes you can qualify for a Customer Loyalty bonus. 

Ultium Promise Bonus Cash – Certain GM EVs do not qualify for the federal $7,500 tax credit, so General Motors is offering buyers of those EVs $7,500 off the price of a new car. 

Customer Cash – This is an incentive credit provided by the manufacturer to go toward the cost of purchasing or leasing a new car. It allows the customer to pay less toward their final tax, tags, and documentation fees. 

Cash Allowance – This denotes a discount applied to the MSRP of a vehicle (see MSRP definition below), which allows dealerships to move cars faster to make room for newer vehicles that are soon to arrive. 

Dealer Discount – This is simply the dealership lowering the cost of the car for the buyer. While customer cash, customer loyalty, etc., are incentives provided by the automaker, a dealer discount is a dealership taking money off the purchase price. 

Trade Assistance – A dealership may be willing to give you an extra $1,000 or so on a car you are trading in because they want to re-sell your car or give you more incentive to trade in your vehicle on their vehicle. This means they get to sell a new or used car and take a vehicle they are confident will sell well as a used car on their lot. 

Member Only Incentive (Costco, USAA, etc) – When you are a member of certain members-only companies, like Costco, BJs, Sam’s Club, USAA, etc., they will offer Chevrolet money to discount new cars for their customers. For example, a new Chevrolet could often qualify for $1,000 off the MSRP just for being a Costco member. 

Bonus Cash – Simply put, bonus cash is extra money that a dealership will put towards the final purchase price of a car, which can assist you in paying less for taxes, tags, and documentation fees. 

Military Program – Active duty members of our armed forces can get special pricing or Bonus Cash on new vehicles as well as various services such as OnStar and SiriusXM subscriptions. 

First Responder Program – Any police officer, firefighter, EMT or paramedic, and 911 dispatcher, along with some other medical professionals, can get special purchase and lease pricing. 

Chevrolet College Program – A person in college for their undergraduate, individuals in grad school, or recent graduates can get special offers and a 90-day payment deferral. This means you won’t have to pay your first car payment for up to 90 days after you purchase your new car.  

Chevrolet Educator Program – This program allows dealerships like Twin Falls Chevrolet to offer special prices and services to teachers. 

MSRP – The Manufacturer’s Suggested Retail Price is the price on the vehicle’s sticker and the value the automaker believes it is worth to buyers. 

Invoice Pricing – The invoice price of a car is the amount of money the dealership paid the manufacturer to put that car on their lot. Dealerships buy their vehicles from automakers and then increase the price enough to make some money to pay for their employees, the lights, the buildings, etc. 

Money Rate (Lease)—This is similar to the interest buyers are charged on the loan of their vehicle, except it pertains to leased cars. 

APR – The Annual Percentage Rate, or APR, combines the interest rate and other fees or charges levied by the lender. 

Gross Income – Gross income is the amount of money an individual makes before taxes and other benefits are accounted for. 

NET income – Net income is the amount of money an individual earns after taxes and other benefits are subtracted from your paycheck. 

Principle – In the world of borrowing money, whether for a house, a car, or something else, the principle is the amount of money you owe, not including interest. 

Interest – Interest is the money that the lender makes when you borrow money from them. When you make payments, you pay toward the principle and the interest simultaneously. This is a monthly percentage added to the principal that a person pays the institution to borrow the money needed to purchase the vehicle.

Term – Term is the amount of time you have to pay off your loan. For example, if you have a 60-month loan, that means you will have regularly scheduled payments for a period of five years unless you are able to pay it off earlier. 

Down Payment – This is the amount of money you put down towards your vehicle, which will lower the price and your total monthly payment if you are financing. 

Base Price – This is the price of a vehicle as it sits without any extras or options added to the value. 

Dealer Incentives – A dealer incentive is a specific deal given to customers when purchasing or leasing a vehicle. For instance, sometimes a dealer incentive revolves around offering special finance rates, lease rates, or other ways to get buyers in a new car, such as bonus cash and the like. 

Lender – This refers to the bank or institution that loans you money to purchase your car. 

Cosigner – A cosigner is a person who assists in helping buyers with poor or little credit be able to secure a car loan. This adds an extra layer of security to the lender to ensure they get paid the money they are owed. 

GAP Insurance – Guaranteed Asset Protection insurance, or GAP, is an add-on that buyers can add to the purchase price of their car. It assists in covering the difference between the value of your vehicle and what you owe if you were to get into an accident and total the vehicle. Let’s say you owe $13,000 on your car, but the actual value of it is only $10,000. If you get into an accident that totals your car, you will still owe your lender $3,000 for the total value of the loan. GAP insurance helps to cover that difference. 

Acquisition Fee – When leasing a vehicle, the bank/lender you are working with will charge an acquisition fee that essentially covers their administrative costs to write the lease deal. This fee can sometimes be attributed to the upfront “due at signing” cost you must pay when obtaining a lease. 

Disposition Fee – This is the fee incurred when turning in a leased vehicle. It is meant to cover the cost of cleaning and preparing the car for resale once it is turned back in. 

Transportation Fee – A simple fee added to the total price of a vehicle that has been shipped or transported to another location for purchase. For example, Twin Falls Chevy doesn’t have a specific color or option for a vehicle you want, but they can get it from another dealer. The transportation fee covers the cost of having someone bring the car to Twin Falls Chevy to sell to you. 

Title – This refers to the document that shows you are the owner of a vehicle outright without owing any money on it. If you did take out a loan from a bank, they will hold the title until the loan is repaid in full, at which time they will release it to you to prove your ownership. 

Amortization – This is the term used to describe paying down or off your loan. Some of the monthly payment goes towards the principal while some money goes towards the interest. The amortization is the combination of the two when paying your loan installments. 

Depreciation – This is the amount of value that a vehicle loses after a certain period of time. 

We hope this helps you understand that buying or leasing a vehicle does not have to be as daunting or worrisome as you may expect. We here at Twin Falls Chevrolet are happy to assist you with all of your car-buying needs, especially when it comes to making you feel comfortable and at ease with the buying process. 

At Twin Falls Chevrolet, we pride ourselves on providing you with the absolute best sales and service possible. With hundreds of new and used vehicles, our talented sales team and finance department will help you find the best one for you and your family. And our fantastic service department will keep that vehicle in the best condition for you.

We look forward to serving you.