Terms You Have to Know and Understand When Financing Your New or Used Car

The only financing terms you have to know when financing a new or used car are buy rate and sell rate.

As long as you know to ask to see the buy rate, there is no way the dealer can make money on the financing.

Always ask to see the dealer financing sheet for the bank's buy rates. Don't trust the dealer to shoot straight with you. Demand to have the dealer prove to you that the buy rate is what they say it is.

If the dealer shows you the financing sheet, it will list the buy rates for "Tier one," which you have to have a score above 700 to get, then a higher buy rate for tier two if your score is below 700 and so on.

For a complete glossary of terms, visit Edmunds.com.