Special Finance
A sector of the auto lending industry for borrowers with a limited or tainted credit history. Special financing in the auto finance industry is risk based, which means that the terms of the loan are set so that the expected returns to the lender/investor are great enough to cover the risk of default by the borrower. Special finance loans typically carry a higher interest rate than is available to borrowers with a clean credit history.

Investopedia Says:
Special finance auto loans should be shopped around by a borrower. Like any other product, auto financing is competitive. The best way a consumer can ensure that he or she is getting a competitive market price (rate) on a special finance loan is to shop around.

Related Terms:
Bad Debt
Credit Rating
Credit Risk
Default Risk
Impaired Credit
Subprime

• Long Run Incremental Cost (LRIC)
• Long Run Incremental Cost (LRIC)
• Long/Short Equity
• Long/Short Fund
• Long Squeeze
• Long Straddle
• Long Term
• Long-Term Assets
• Long-Term Capital Gain Or Loss
• Long-Term Capital Management (LTCM)
• Long-Term Capital Management (LTCM)
• Long-Term Care (LTC) Insurance
• Long-Term Care (LTC) Insurance
• Long-Term Debt
• Long-Term Debt/Capitalization
• Long-Term Equity Anticipation Securities (LEAPS)
• Long-Term Equity Anticipation Securities (LEAPS)
• Long-Term Growth
• Long-Term Incentive Plan (LTIP)
• Long-Term Incentive Plan (LTIP)
• Long-Term Investments
• Long-Term Liabilities
• Long The Basis
• Look-Ahead Bias
• Lookback Option