Glossary of Auto Loan Terms
(S)
Secured Loan
A secured loan is on in which the borrower submits collateral in
exchange for money. In the case of a car loan, the vehicle is often
used as the collateral to secure the loan.
Service Charge
A service charge is an amount added to a payment, usually for making
a payment after the due date. Service charges may also be added if a
check is rejected.
Service Contract
The service contract is an agreement between the buyer and seller
regarding the service of the car. In most cases, this means that the
buyer agrees to certain regular maintenance details and the seller
agrees to work on specific parts of the car in case of a problem.
Sticker Price
The sticker price is that price on the side of the car, typically
suggested by the manufacturer, and is the starting point for the
purchase price of the car. Buyers should realize that dealers are
sometimes willing to negotiate on this point and that the actual
cost may be less than the sticker price. It should also be noted
that the sticker price doesn’t include the cost of insurance, tags,
taxes or financing.
Substitution of Collateral
A substitution of collateral is merely changing that property that
is being held as security for a lien. The lender must agree to the
change. The substitution might occur when the original vehicle is
totaled. |
