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Major Life Purchases
| Term | Definition |
|---|---|
| Acquisition Fee | An acquisition fee is a charge from a lessor or lender to cover the expenses incurred for arranging a lease or loan. |
| Closed End Lease | Closed-end leasing is a contract-based system governed by law in the U.S. and Canada. It allows a person the use of property for a fixed term, and the right to buy that property for the agreed residual value when the term expires. |
| Collateral | something pledged as security for repayment of a loan, to be forfeited in the event of a default. |
| Dealer incentives | A dealer incentive is a financial inducement used by manufacturers to motivate dealers to sell a particular product by offering discounts on that product. |
| 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 | an amount in accounting that is commonly a fixed percentage of the original cost of a property and that is periodically charged off to expense or against revenue in order to compensate for the depreciation of the property. |
| Early Termination | Early Termination means the Termination of Employment before Normal Retirement Age for reasons other than death, Disability, Termination for Cause or following a Change of Control. |
| Finance Charge | In United States law, a finance charge is any fee representing the cost of credit, or the cost of borrowing. It is interest accrued on, and fees charged for, some forms of credit. |
| 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. This allows the borrower to accurately predict their future payments. |
| Inception Fees | Any fees that are due at lease inception. Inception fees may include a down payment, security deposit, acquisition fee, first month's payment, taxes or title fees. |
| Installment Loan | An installment loan is a type of agreement or contract involving 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 | The actual price paid to the manufacturer or distributor by the end-customer retailer, which is known as the invoice price. |
| 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 | Mileage allowance is 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 | The term mileage charge is usually associated with automobile leases or car rentals. These are the per mile fees imposed when a vehicle is driven beyond the miles allowed in the lease or rental agreement. |
| Money Factor | The money factor is a method for determining the financing charges on a lease with monthly payments. |
| MSRP | The list price, also known as the manufacturer's suggested retail price, or the recommended retail price, or the suggested retail price, of a product is the price at which the manufacturer recommends that the retailer sell the product. |
| Open End Lease | An open-end lease is a type of rental agreement that obliges the lessee 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 | Purchase option, defined as the opportunity to purchase a piece of property which is being leased after the lease is completed, is part of the many options available in a lease agreement. |
| Rebates | a partial refund to someone who has paid too much money for tax, rent, or a utility. |
| Residual Value | One of the constituents of a leasing calculus or operation. It describes the future value of a good in terms of absolute value in monetary terms and it is sometimes abbreviated into a percentage of the initial price when the item was new. |
| Secured Loan | A secured loan is a loan in which the borrower pledges some asset as collateral for the loan, which then becomes a secured debt owed to the creditor who gives the loan. |
| Trade-in Value | The trade-in value of a car is the amount of credit that a car dealer is willing to offer you toward the purchase price of a new or used car in exchange for ownership of your old car. |
| Unsecured Loan | In finance, unsecured is any type of debt or general obligation that is not protected by a guarantor, or collateralized by a lien on specific assets of the borrower in the case of a bankruptcy or liquidation or failure to meet the terms for repayment. |
| Upside down | Upside-Down Loan. A loan secured by a collateral that has depreciated in market value and is worth less than the balance owed. |
| Variable Rate Loan | A floating interest rate, also known as a variable or adjustable rate, refers to any type of debt instrument, such as a loan, bond, mortgage, or credit, that does not have a fixed rate of interest over the life of the instrument. |
| 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. |
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