What Finance Terms Mean at Keyes European Mercedes-Benz
If you’re shopping for a new Mercedes-Benz vehicle, it’s better than even money that you know your way around a car. It’s also likely that you know quality when you see it. But if you’re anything like many of the Beverly Hills car buyers visiting Keyes European Mercedes-Benz, there are plenty of things you’d rather think of than financing or leasing that new car or SUV. Relax. We keep the Mercedes-Benz financing process simple and painless — one reason we’ve compiled a few of the more common terms you’ll encounter in the finance process.
Common Finance Terms
Mercedes-Benz Financial Services (MBFS): MBFS is where your credit check and subsequent loan or lease will typically originate.
APR: Think of the Annual Percentage Rate — the interest and fees incurred on borrowed money — as the cost of your loan or lease.
Buyout Price: You’ll have the option to buy out your car when the lease is up; that cost should be compared against the cost to buy outright.
Credit Score: Your numerical credit score is based on the amount and kinds of credit you’ve been issued, how much of it you’re utilizing, and whether your payments are timely. That, in turn, determines interest rates and your eligibility for many incentives.
Finance: Financing is the loan you’ve taken to purchase your vehicle.
Gap Insurance: In the event of a collision, gap insurance covers the replacement value of your vehicle rather than its depreciated value.
Lease: Rather than owning a new Mercedes-Benz car and making payments, the dealership assumes ownership and you pay them monthly for a fixed term. Once the lease is up, you may return the vehicle or buy it out for a pre-disclosed amount.
Principle: The principle is the amount borrowed before interest and fees. If you’ve put down a $10,000 down payment on a Mercedes-Benz CLA that costs $39,000, your principle would be $29,000.
Our Mercedes-Benz Finance Department
Bear in mind that your Mercedes-Benz dealership serving Beverly Hills works with a number of lenders and credit unions in addition to MBFS. That leaves you with more options in the event that you’re building or repairing your credit, but is also likely to leave you with more questions. That’s why we encourage you to visit 5400 Van Nuys Blvd in Van Nuys, CA, and Keyes European. We can shed light on the financing process and help with every other aspect of your lease or ownership experience.