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Major Life Purchases
| Term | Definition |
|---|---|
| Acquisition Fee | a charge from a lender or lessor to cover the expenses incurred for arranging a loan or lease agreement. |
| Closed End Lease | at lease-end you are responsible for the condition of the vehicle |
| Collateral | an asset or group of assets that a borrower or guarantor has pledged as security for a loan. |
| 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 | when expenses exceed revenues, imports exceed exports, or liabilities exceed assets |
| Depreciation Fee | the cost of an asset less accumulated depreciation. The depreciation costs are noncash business expenses. |
| Early Termination | typically the difference between the balance remaining on the lease (lease payoff amount) and the amount credited for the vehicle (realized value of the vehicle). |
| Finance Charge | a fee charged for the use of credit or the extension of existing credit. |
| Fixed Rate Loan | one where your interest rate is locked in (i.e. fixed) for a certain period, typically between one and ten years. |
| Inception Fees | Any fees that are due at lease inception. |
| Installment Loan | allow individuals to borrow a predetermined amount of money, disbursed in a lump sum, that can be repaid over time. |
| Invoice Price | is the price that the merchant pays for the product before marking it up to sell. |
| Lease | a contract by which one party conveys land, property, cars, 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 | the deductibility of expenses car owners accrue while operating a personal vehicle for business, medical, charity, or moving purposes. |
| Mileage Charge | the charge for any miles travelled by an Advantage Vehicle during the Rental Period in excess of the Inclusive Mileage Allowance and/or the Maximum Mileage allowance. |
| MSRP | Manufacturer Suggested Retail Price- the price that the automaker – the manufacturer – suggests that the dealer ask for the vehicle. |
| Open end Lease | you are responsible for the vehicle's value |
| Purchase Option | assures the option holder of the right to purchase property at a certain price within a certain time period but without an 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 | loans that are secured by a specific form of collateral, including physical assets such as property and vehicles or liquid assets such as cash |
| Trade- In value | the amount of money that a dealer will offer for the vehicle |
| Unsecured Loan | a lender provides money to a borrower without any legal claim to the borrower's assets in case of default |
| Upside Down | you owe more on your car than it's actually 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. |
Created by:
razzarella
Popular Finance sets