Subaru Lease and Finance Glossary

Whether you're financing your next daily drive or are applying for a Subaru lease, it's important to understand the jargon you'll see during the process. Keep an eye out for these terms you'll likely find during your application at Herb Gordon Subaru. If you're ever confused, talk to our expert team-we're here to help you understand all of the options available to you.

Interest Rates

You'll usually see the interest rate on a car loan referred to as the APR, or annual percentage rate, especially when comparing our Subaru specials. On a lease, you'll find the rate expressed as a money factor, which means it'll be a very small decimal. You can compare the two by multiplying the money factor by 2,400-that will give you the rate as a percentage.

Down Payments

Traditional financing usually will require a down payment, and even if you find a no-money-down offer, making a down payment is almost always a good idea. Every dollar you put down reduces your loan, which shrinks your monthly payment and helps with interest rates. For a lease, you'll want to look for the Acquisition Fee to see what you'll pay up front and consider a Cap Cost Reduction to lower your monthly costs even more.

Excessive Wear and Tear

If you lease a new Subaru car, you'll be responsible for excessive wear and tear at the end of your term. To reduce this as much as possible, have your car cleaned and detailed before you return it to us. You will also be responsible for extra miles over the mileage cap, as these put more wear on the car, even if there are no obvious issues.

Equity

When you make a monthly payment on a loan, you're building equity. Equity is the amount of your car that you currently own, and every time you make a payment, it goes up. However, early on in your loan, you may have negative equity, which means you owe more money on the car than it's currently worth.

GAP Insurance

GAP is an acronym for Guaranteed Asset Protection, but the abbreviation makes it easy to remember what this insurance does: cover the gap. If you owe more than the car is currently worth and it's stolen or totaled, GAP insurance ensures you won't have to pay for the extra cost out of pocket. It comes standard as part of a Subaru lease, so you may already have this automatic coverage.

Finance or Lease a Subaru Car in Silver Spring, MD

Financing and leasing are both great ways to get behind the wheel. Find out more about your options at our Silver Spring Subaru dealership and explore our wide-ranging lineup. Apply for Subaru financing and take a test drive today!