A deeper understanding of the auto finance terminologies will help you make informed decision when it comes to buying or leasing a vehicle. Here are some of the terms:
- Securitization – assets are converted into securities, which are then traded on the financial market as financial instruments.
- Service Contract – Maintenance and services contracts between a contractor and a customer for a predetermined period of time.
- Short-term Note – One year from the date of the note’s release, a note with a clear fixed maturity period.
- Subprime – this is a term used to describe borrowers who are at risk of being overdue or defaulting on a loan because of their low credit rating. Between 620 to 550 is the normal range for subprime borrowers’ credit scores. Customers may also be classified as having no financial history or being in a temporary financial crisis.
- Subscription Services – Customers can rent a vehicle for a set monthly rate that include everything. Roadside assistance, insurance, and general upkeep are included in the monthly charge for the car.
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