Glossary of Auto Loan Terms

Auto Term Glossary

• Finance Charge – the total interest charges you will incur over the life of your loan.
• Loan-to-Value Ratio – divide the total dollar value amount of your loan by the actual retail value of the vehicle to get this ratio.
• Principal – the amount, not including interest, owed on the loan.
• MSRP/Retail Value – The manufacturers suggested retail price of the vehicle.
• Buyer’s Order (Bill of Sale) – a form used by the seller to document the sale of the vehicle.
• APR (Annual Percentage Rate) – this is the percentage paid each year the vehicle is financed. An individual person’s APR will depend on their credit.
• Delinquency - delinquent status can be met by failure to pay your loans.
• Kelley Blue Book and NADA – used to help determine the value of a vehicle.
• Prepayment Penalties – charges you could incur for paying a loan off early. If you think you could pay your loan off early, do not select a loan that penalizes you for this. Dominion Energy Credit Union does not assess prepayment penalties on our consumer loans.
• Dealership Fees – these fees can include fees such as vehicle preparation fees and documentation/ administration fees. In some cases, these fees can be negotiable.
• Invoice Price – the price the dealership paid for the vehicle from its manufacturer.
• Default – breaching of a credit agreement, resulting in failure to pay, or provide collateral.

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