Buying a car can be an exciting experience. Whether you are in the market for new or used car financing in Missouri, there is a vast range of options available, and looking for the perfect car, if you take your time, is a lot of fun. However, understanding your financing options can also be confusing. It is important to learn a few commonly-used terms before you begin your search for the perfect vehicle.  

Dealer Sticker Price

This is the price that the dealership is asking for that particular vehicle, and it is literally on a sticker in the car's window. While the price is an important consideration, it is not the only piece of relevant information that can be found on the sticker. If you look closely, you will see the base price of that car model, plus the itemized options that are installed on that car. The sticker will also tell you the specific information about the motor, the type of transmission, and the average fuel mileage for both highway and city driving. You can use these pieces of information to make a more informed choice about what you are looking for in a vehicle.  


This is the Manufacturer's Suggested Retail Price. In other words, this is the price that the company that made the car thinks it should be sold for. However, most car dealers determine their own price based on their inventory and the demand for that particular type of vehicle in the local market. You will find the MSRP on the car's window sticker.  

Credit Score

Before you apply for financing, it is important that you know and understand your own credit score. Your credit score is what the bank or financing company uses to determine the terms of your loan offer. If your credit score is better than most other people's score, you are likely to get a lower interest rate and a lower payment. However, if your credit score is below average, you are likely to get offered a loan at a higher interest rate and you may be offered a high monthly payment. It is important to know how your credit score stacks up before you apply for financing. If your credit score is too low, it may be a good idea to work on improving it before you apply for financing.  

Down Payment

The down payment is the money you will need to have when you sign your loan, before you take your vehicle home. Usually, a down payment is in the range of 10-20 percent of the total cost of the vehicle you are purchasing. Sometimes it is a good idea to increase the size of your down payment, if you have the money to do so. A larger down payment will give you a lower monthly payment over the life of your car loan. Sometimes, dealerships offer promotions such as no down payment, which are generally available to buyers who have better-than-average credit scores.  

Annual Percentage Rate (APR)

You will need to know and understand the amount of interest you will be paying each year before you sign your new car loan. The Annual Percentage Rate can vary greatly, depending upon your credit score, the size of your down payment, the type of vehicle you are purchasing and the bank or financing company that is offering the loan.  

Auto Loan Term

The term of your auto loan refers to the timeframe you have to pay off the loan. Three years is a common auto loan term, although you may be offered a loan that has a shorter term of 1-2 years, or a longer term, such as 5-6 years. Remember that while a longer term will give you a lower monthly payment, you will also end up paying more over the life of your auto loan. That is because the APR will be in effect for each year you pay, so a longer term equates to more interest that you will have to pay over the life of the loan. A shorter term will give you a higher payment each month, but you will own your vehicle more quickly and pay less interest.  


The term principal refers to the total amount of money you are borrowing from the bank or finance company. In the case of a car loan, the principal is the total purchase price of the vehicle you are buying. Your interest rate will be applied based on the principal.  

Trade-in Value

When you are shopping for a new or used car in Missouri, you may want to trade the vehicle you are currently driving into the dealer. While selling an old car on your own can be a hassle, trading in a car is a simple way to reduce the amount of money you will need to borrow. Be sure to ask us about the trade-in value of the vehicle you currently own.

Lee's Summit Subaru

2101 NE Independence Ave
Directions Lees Summit, MO 64064

  • Call or Text Sales: (816) 251-8600
  • Service: (816) 251-8650
  • Parts: (816) 251-8670


  • Monday 8:30am - 7:00pm
  • Tuesday 8:30am - 7:00pm
  • Wednesday 8:30am - 7:00pm
  • Thursday 8:30am - 7:00pm
  • Friday 8:30am - 6:00pm
  • Saturday 8:30am - 6:00pm
  • Sunday Closed

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