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Major 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 | 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 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 | the remaining cost of an asset after the related amount of accumulated depreciation has been deducted from it |
| Early Termination | a summary of all the various ways in which actions can be determined early, without the need for a full trial |
| Finance Charge | fee charged for the use of credit or the extension of existing credit |
| Fixed Rate Loan | an unchanging rate charged on a liability |
| Inception Fees | the initial set of fees that you would need to pay when you lease something |
| Installment Loan | closed-ended credit accounts that you pay back over a set period of 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 | a person who holds the lease of a property |
| Lessor | a person who leases or lets a property to another |
| Mileage Allowance | the number of miles allowed to be travelled on a rented vehicle |
| Mileage Charge | the per mile fees imposed when a vehicle is driven beyond the miles allowed in the lease or rental agreement |
| Money Factor | the amount to be paid by the lessee monthly |
| MSRP | manufacturer's suggested retail price; the price that a product's manufacturer recommends it be sold for at the point of sale |
| 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 |
| Purchase Option | the opportunity to purchase a piece of property which is being leased after the lease is completed |
| 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 | a loan backed by collateral—financial assets you own |
| Trade-In Value | the amount that a car dealer pays you toward the purchase price of a new or used car in exchange for your old car |
| Unsecured Loan | loans that don't require collateral |
| Upside Down | you owe more on your car than it's actually worth |
| Variable Rate Loan | a rate on a loan or security that fluctuates over time because it is based on an underlying benchmark interest rate or 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:
ebowers2424
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