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Major Life Purchases
| Term | Definition |
|---|---|
| Acquisition Fee | Fee to cover the expenses incurred in arranging a lease |
| Closed End Lease | A rental agreement that puts no obligation on the lessee (the person making periodic lease payments) to purchase the leased asset at the end of the agreement. |
| Collateral | Something pledged as security for repayment of a loan, to be forfeited in the event of a default. |
| Dealer Incentives | 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 | The value of a fixed asset net of all accumulated depreciation that has been recorded against it. |
| Early Termination | A charge levied when a party wants to break the term of an agreement or long-term contract. |
| Finance Charge | The total amount of interest and loan charges you would pay over the entire life of the mortgage loan. |
| Fixed Rate Loan | A loan where the interest rate doesn't fluctuate during the fixed rate period of the loan. |
| Inception Fees | Any fees that are due at lease inception. |
| Installment Loan | You borrow a specific dollar amount from a lender and you agree to pay the loan back, plus interest, in a series of monthly payments. |
| Invoice Price | The automobile manufacturer's original charge to the dealer. This includes freight, destination or delivery charges. |
| 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 | A term the IRS uses to refer to the deductibility of expenses car owners accrue while operating a personal vehicle for business, medical, charity or moving purposes. |
| Mileage Charge | Charge for driven distance that exceeds maximum allowed mileage (or kilometers), usually levied on per mile (or kilometer) basis. |
| Money Factor | An alternative method of presenting the amount of interest charged on a lease with monthly payments. |
| MSRP | The manufacturer's suggested retail price, a price recommended for the sale of an item in all retail outlets. |
| Open End Lease | A type of rental agreement that obliges the lessee (the person making periodic lease payments) to make a balloon payment at the end of the lease agreement amounting to the difference between the residual and fair market value of the asset. |
| Purchase Option | A clause in a lease agreement that allows the lessee to purchase the leased asset at the end of the lease period at a price substantially below its fair market value. |
| Rebates | A partial refund to someone who has paid too much money for tax, rent, or a utility. |
| Residual Value | The remaining value of an asset after it has been fully depreciated. |
| Secured Loan | A loan backed by collateral |
| Upside Down | A situation in which one owes more on a loan used to pay for an asset than that asset's current market value. |
| Variable Rate Loan | The interest rate on the loan balance changes as rates in the market change, based on an index. |
| Warranty | A 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. |
Created by:
jbowers21
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