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major life purchases
| Question | Answer |
|---|---|
| acquisition fee | a charge from a lender or lessor to cover the expenses incurred for arranging a loan or lease agreement. |
| closed end lease | rental agreement that puts no obligation on the lessee |
| collateral | an asset, such as a home or a car, pledged by a borrower that a lender accepts as security against a loan in case the borrower for any reason cannot pay back the loan. |
| dealer incentives | a financial strategy used by manufacturers to motivate dealers to sell their products by offering discounts on those products. |
| default | failure to fulfill an obligation, especially to repay a loan or appear in a court of law. |
| deficiency | a lack or shortage. |
| depreciation fee | also known as net book value, is the cost of an asset less accumulated depreciation. The depreciation costs are noncash business expenses. |
| early termination | the dissolution of a contract before the term of that contract has concluded |
| finance charge | the total amount of interest and loan charges you would pay over the entire life of the mortgage loan |
| fixed rate loan | fixed interest rate home loan is one where your interest rate is locked in (i.e. fixed) for a certain period, typically between one and ten years. |
| inception fee | Any fees that are due at lease inception. |
| installment loan | allow individuals to borrow a predetermined amount of money, disbursed in a lump sum, that can be repaid over time |
| invoice price | the amount a dealership pays the manufacturer for the vehicle |
| lease | a contract by which one party conveys land, property, services, etc. to another for a specified time, usually in return for a periodic payment. |
| lessee | the person making periodic lease payments |
| lessor | a person who leases or lets a property to another; a landlord. |
| mileage allowance | 65.5 cents per mile for business purposes. 22 cents per mile for medical and moving purposes. 14 cents per mile for charitable purposes. |
| mileage charge | charges drivers based on the number of miles each vehicle travels. |
| msrp | “manufacturer's suggested retail price,” it's basically a price recommendation—what companies like Ford or Honda say dealers should charge for their vehicles. The actual selling price may be higher or lower than the MSRP |
| open end lease | you are responsible for the vehicle's value |
| purchase option | assures the option holder of the right to purchase property at a certain price within a certain time period but without an obligation to do so. |
| rebates | A rebate is a form of buying discount and is an amount paid by way of reduction, return, or refund that is paid retrospectively. |
| residual value | the estimated worth of an asset after the asset has fully depreciated |
| secured loan | debt products that are protected by collateral. |
| trade in value | the price a dealer would offer for a consumer's vehicle to apply toward the purchase of another car in the dealer's inventory. |
| unsecured loan | a loan that doesn't require any type of collateral. |
| upside down | owing more on your car then it is actually worth |
| variable rate loan | a type of loan where the interest changes according to changes in market interest rates. |
| warranty | written guarantee, issued to the purchaser of an article by its manufacturer, promising to repair or replace it if necessary within a specified period of time. |
| Money factor | The amount of interest to be paid by the lessee monthly |
Created by:
tbraidich23
Popular Finance sets