Glossary of Auto Loan Terms
(B)
Bankrupt
A business or individual will usually declare themselves bankrupt
when they are unable to meet current debts and requirements.
Bankruptcy
A business or individual may declare bankruptcy if they are unable
to meet financial obligations. While a bankruptcy gives the credit
rating a serious blow, there are ways to get a car loan with a
bankruptcy on the report. For example, some lenders advertise that
they specialize in potential borrowers who have made a declaration
of bankruptcy. Beware that these lender typically have higher
interest rates and less desirable terms.
Base Price
The base price is the cost of a car without any extra options or
add-ons.
Basis Point
The basis point is an accounting term and is generally used to show
the difference between two small percentages.
Before-tax income
The before-tax income is sometimes referred to as gross income. This
is the amount that you, as a potential borrower, earn from your job.
Black Book
A reference book used to determine the price of a particular
vehicle. The Black Book is similar to the Kelly’s Blue Book and can
be found online at
www.blackbookusa.com.
Book Value
The book value is the amount assigned to a particular vehicle. The
two most common “books” for reference are Kelly’s Blue Book and the
Black Book.
Borrower
A person who takes out a loan and agrees to be responsible for
repaying the loan amount.
Branded Titles
Branded titles are those documents that have been stamped as having
undergone some particular event. The most common type of branded
title is the “salvage vehicle.” Usually, the notation indicates that
the vehicle has been in an accident and has been rebuilt. In some
cases, lender won’t loan on a branded title because the potential
for problems is higher than with an untouched title.
Breach of Contract
A breach of contract occurs when one or the other of the parties |
