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Major Purchases
| Term | Definition |
|---|---|
| Acquisition Fee | DEFINITION of 'Acquisition Fee' A fee charged by a lessor to cover the expenses incurred in arranging a lease. |
| Closed End Lease | DEFINITION of 'Closed-End Lease' A rental agreement that puts no obligation on the lessee (the person making periodic lease payments) |
| Collateral | something pledged as security for repayment of a loan, to be forfeited in the event of a default |
| Dealer Incentives | Dealer incentives are factory-to-dealer incentives that reduce the dealer's true cost to buy the vehicle from the factory. |
| 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 | Depreciated Cost = Purchase Price (or cost basis) – {Cumulative Depreciation} Depreciated cost is also known as the "net book value" or "adjusted cost basis" |
| Early Termination | An early termination fee is a charge levied when a party wants to break the term of an agreement or long-term contract |
| Finance Charge | In United States law, a finance charge is any fee representing the cost of credit, or the cost of borrowing |
| Fixed Rate Loan | A fixed interest rate loan is a loan where the interest rate doesn't fluctuate during the fixed rate period of the loan |
| Inception Fees | The term, lease inception or lease inception cash, refers to the up-front money that is due at the time a car lease agreement is signed (“lease signing” |
| Installment Loan | An installment loan is a loan that is repaid over time with a set number of scheduled payments; normally at least two payments are made towards the loan |
| Invoice Price | Invoice Price: This is roughly what the dealer paid the carmaker 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 | a person who holds the lease of a property; a tenant |
| Lessor | a person who leases or lets a property to another; a landlord |
| Mileage Allowance | DEFINITION of 'Mileage Allowance' A deduction of automobile expenses for people using their vehicles for business, charity, moving, medical or any other purpose that qualifies for a deduction |
| Mileage Charge | Rental car charge for driven distance that exceeds maximum allowed mileage (or kilometers), usually levied on per mile (or kilometer) basis |
| Money Factor | A money factor is the alternative method of presenting the amount of interest charged on a lease with monthly payments |
| MSRP | A: The Manufacturer's Suggested Retail Price — also known as “sticker” price |
| Open End Lease | What is an 'Open-End Lease' A rental agreement that obliges the lessee (the person making periodic lease payments) |
| Purchase Option | The right, but not the obligation, to buy a leased item at a predetermined price. With a fixed price purchase option, the purchase price is established when the lease terms are agreed upon |
| Rebates | a partial refund to someone who has paid too much money for tax, rent, or a utility |
| Residual Value | Residual value is one of the constituents of a leasing calculus or operation. ... In accounting, residual value is another name for salvage value, the remaining value of an asset after it has been fully depreciated |
| Trade-In Value | The net trade-in value is the amount of money offered to you by a car dealer for your old car, to be applied as a credit toward your purchase of a new vehicle |
| Unsecured Loan | An unsecured loan is a loan that is issued and supported only by the borrower's creditworthiness, rather than by any type of collateral |
| Upside Down | owe more on your car loan than your car is actually worth |
| Variable Rate Loan | A variable interest rate is an interest rate on a loan or security that fluctuates over time, because it is based on an underlying benchmark interest rate or index that changes periodically |
| Warranty | (in an insurance contract) an engagement by the insured party that certain statements are true or that certain conditions shall be fulfilled, the breach of it invalidating the policy |
Created by:
bturner17
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