Are you looking to purchase a vehicle? Whether it's your first time or you haven't purchased one in a while, you may be unfamiliar with common terminology used in the auto industry.

Understanding auto finance terminology will help equip you for the financing process better and make it feel less overwhelming. Here is a look at five auto finance terminology terms to know about:

1. Creditworthiness: This determines an individual's ability to repay debts.

2. Cosigner: This is an additional party who assumes equal responsibility for an auto loan. A person may need a cosigner if their financial background isn't strong enough.

3. Credit History: This is a record of your financial history. Your credit history allows lenders to determine your eligibility to repay loans.

4. Bill of Sale: This is a document prepared by the seller or dealership. A bill of sale records the details of a vehicle sale.

5. Balloon Payment: This can make monthly payments lower on a car loan. However, it requires a big payment to be made at the end of the term.