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major purchases
| Term | Definition |
|---|---|
| Acquisition Fee | a charge from a lessor or lender to cover the expenses incurred for arranging a lease or loan |
| 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 | 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 |
| depreciation fee | the value of a fixed asset minus all of the accumulated depreciation that has been recorded against it |
| early termination | the dissolution of a contract before the term of that contract has concluded |
| finance charge | a cost imposed on a consumer who obtains credit |
| fixed rate loan | an interest rate that stays the same for the life of a loan, or for a portion of the loan term, depending on the loan agreement |
| inception fees | which is the initial set of fees that you would need to pay when you lease a car |
| installment loan | a broad, general term that refers to the overwhelming majority of both personal and commercial loans extended to borrowers |
| invoice price | the initial price that the manufacturer charges the dealer |
| 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 Internal Revenue Service (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 | A car rental charge applied if allowed miles are exceeded in a rental agreement |
| money factor | a method for determining the financing charges on a lease with monthly payments |
| MSRP | the manufacturer's suggested retail price |
| open end lease | 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 | a right to purchase or lease land or other property interests without any obligation to do so |
| rebates | a partial refund to someone who has paid too much money for tax, rent, or a utility |
| residual value | the estimated value of a fixed asset at the end of its lease term or useful life |
| secured loan | are business or personal loans that require some type of collateral as a condition of borrowing |
| trade in value | basically a car dealership's valuation of your car when you opt for a trade-in |
| upside down | escribes the situation when you buy something on credit and now owe more for it than it is worth |
| variable rate loan | 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 | 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:
Amillz
Popular Finance sets