What is a "lifetime rate cap"?

What is a "lifetime rate cap"?

James Bell (Publisher, Auto Reviewer) gives expert video advice on: What does "balloon payment" mean?; What does "base value" mean"?; What does "buy here, pay here" financing mean? and more...

With regards to financing your car, a lifetime rate cap is adjustable financing. For example you may take on the loan at 5%; however, over the term of the loan, it can increase up to 7%. The lifetime rate cap just makes sure that it can't go anything past that pre-agreed 7%.