Glossary of Auto Loan Terms
(I)
Impound
The term “impound” refers to the holding of a vehicle for a specific
purpose. For example, a vehicle might be impounded if the buyer
fails to meet the terms of the lender.
Indirect Financing
Indirect financing is accomplished by going through an intermediary
who negotiates the terms of the contract. In contrast, direct
financing occurs when an individual borrower approaches a lender
with a request for a loan.
Inflation rate
The inflation rate is a nationally derived figure that represents
the cost of living based on the cost of goods and services. When
inflation rates soar, car dealers may be willing to make better
deals in order to make sales.
Inspection
An inspection was once required for all vehicles but some states
have now eliminated mandatory inspections. Typically, a person
trained to spot specific problems looks over the vehicle for
specific flaws, such as a headlight that doesn’t work.
Installment Plan
A contractual agreement through which the lender agrees to make
regular payments toward the purchase or lease of a vehicle.
Typically, an installment plan will require monthly payments.
Interest
The interest is that amount charged by the lender for the privilege
of borrowing money.
Interest Rate
The interest rate is that amount - usually represented as a
percentage - charged by the lender for allowing another to borrow
money. Interest rates vary based on several factors, including the
borrower’s credit rating. A borrower who was unable to achieve a low
interest rate may find that refinancing before the end of the loan
term could help lower the rate.
Invoice Price
The invoice price is that amount agreed upon by the buyer and seller
for a vehicle and recorded on a legal document, the invoice. |
