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Major Purchase
| Term | Definition |
|---|---|
| acquisition fee | a charge levied to cover the expenses incurred when arranging a loan or lease agreement |
| closed end lease | is a type of leasing agreement where the person using the asset is not responsible |
| collateral | something pledged as security for repayment of a loan |
| dealer incentives | financial offers from car manufacturers to dealerships to encourage sales |
| default | failure to fulfill an obligation, especially to repay a loan |
| deficiency | a lack or shortage |
| depreciation fee | the amounts recognized on the income statement to reflect this decline in value |
| early termination | allows parties to end the agreement before its scheduled expiration date under specific conditions |
| finance charge | A finance charge is the total cost of credit |
| fixed rate loan | a type of loan where the interest rate remains unchanged for the entire term of the loan or for a part of the loan term |
| inception fees | payments that must be made at the beginning of the lease |
| installment loan | is a type of loan where a borrower receives a set amount of money and agrees to repay it with interest over a fixed period |
| invoice price | the actual price that the end-customer retailer pays to the manufacturer or distributor for a product |
| lease | a contract by which one party conveys land, property, services, etc. to another for a specified time |
| lessee | a tenant |
| lessor | a landlord |
| mileage allowance | a tax deduction set by the IRS that allows you to deduct a fixed amount per mile driven for business, medical, charitable, or certain moving purposes |
| mileage charge | is a per-mile payment for the use of a personal vehicle for business, medical, or other specific purposes |
| money factor | is a financing cost in a car lease, essentially the interest rate portion of your monthly lease payment |
| MSRP | (Manufacturer's Suggested Retail Price) It's the price a manufacturer recommends a dealer charge for a product |
| open end lease | a type of rental agreement where the lessee is responsible for the asset's residual value at the end of the lease term |
| 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 |
| residual value | the estimated worth of an asset at the end of its useful life or lease term |
| secured loan | a loan backed by collateral |
| trade in value | the amount a dealership offers you for your old vehicle when you use it as part of a purchase for a new or used car |
| unsecured loan | a loan that doesn't require any type of collateral |
| upside down | with the upper part where the lower part should be |
| variable rate loan | a type of loan where the interest changes according to changes in market interest rates |
| 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:
notbrian
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