Glossary of Volvo Finance Terms

Automotive financing can rankle even experienced luxury car buyers. That’s why our Volvo finance team goes above and beyond to ensure our customers not only receive the most competitive finance package for their next vehicle, but also complete transparency at every step. This includes defining finance terms you’re likely to hear at Volvo Cars Gilbert.

Term

The term is the length of a car loan. Most loan terms are between 24 and 72 months long. The benefit to a longer term is that you have lower monthly payments and more time to pay off the car. However, a longer term also means paying more interest on the loan. On the other hand, while a shorter term might have a higher monthly payment, it can help you take full ownership of the car faster and avoid paying excessive interest.

Annual Percentage Rate (APR)

When you finance a vehicle, you borrow money in the form of a loan. This loan allows you to purchase the car. The APR is the yearly rate that you’re charged for the loan. It includes not just the interest on the loan, but also expenses such as processing fees and loan origination fees.

Down Payment

When you purchase a new or a Certified Pre-Owned Volvo vehicle, you can provide a down payment. This is an advance that goes towards paying off your car loan. The higher your down payment, the lower your monthly payments will be. A higher down payment will also help you pay off the loan faster and minimize the amount of interest you pay on the loan.

Principal

The principal is another word for the sum of money you borrow to purchase a car. The principal refers only to the amount borrowed. It does not include interest or fees.

Dealer Incentives

Incentives are offered by car dealerships nationwide. Sometimes they’re long-term, and other times they’re part of a limited-time sales event. Incentives can include things such as a cash-back offer, a lower APR, or discounted pricing on select models.

Lease

Rather than paying the full amount for a new Volvo model, a lease allows you to pay for only a portion of the vehicle’s cost over a predetermined lease term, typically three years. Leases are often a good choice for drivers who want lower monthly payments or extra flexibility.

Apply for Volvo Finance in Gilbert, AZ

Whether you’re a first-time buyer or a long-time customer, Volvo Cars Gilbert guarantees an impeccable level of financing expertise and support. Visit us today to learn more about automotive financing and our Volvo trade-in program, and enjoy a test drive.