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Major Life Purchases
| Term | Definition |
|---|---|
| Acquisition Fee | a charge paid when acquiring something, like a property or a vehicle lease, to cover expenses related to the transaction. |
| Closed End Lease | a type of lease agreement where the lessee (the person renting the asset) is not responsible for the asset's residual value at the end of the lease term. |
| Collateral | something pledged as security for repayment of a loan, to be forfeited in the event of a default. |
| Dealer Incentives | rewards or benefits offered by manufacturers or service providers to dealers to encourage them to increase sales and achieve specific goals |
| Default | failure to fulfill an obligation, especially to repay a loan or appear in a court of law. |
| Deficiency | a shortage or a shortfall, particularly when it comes to debts or financial obligations. |
| Depreciation Fee | the amount a business expends each year to reflect the decrease in value of an asset due to use, wear, and tear, or obsolescence |
| Early Termination | ending a contract, agreement, or service before its originally scheduled expiration date |
| Finance Charge | the total cost of borrowing money, including interest and other fees, such as origination fees, service fees, or late fees. |
| Fixed Rate Loan | a loan where the interest rate remains constant throughout the entire term of the loan. |
| Inception Fees | the upfront payments due when a car lease contract is signed |
| Installment Loan | a type of loan where a fixed amount of money is borrowed and repaid in regular, fixed installments over a set period |
| Invoice Price | the cost of goods or services as indicated on the invoice, reflecting the amount a business owes to a supplier |
| 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 | an amount of money paid for every mile traveled |
| Mileage Charge | a fee that charges drivers based on the number of miles each vehicle travels |
| Money Factor | a financing cost in a car lease, essentially the interest rate portion of your monthly lease payment. |
| MSRP | the recommended selling price set by the manufacturer for a product, often a new car |
| Open End Lease | a type of rental agreement where the lessee (the person making payments) is responsible for the asset's residual value at the end of the lease term. |
| Purchase Option | a contractual agreement that grants a buyer the right, but not the obligation, to purchase an asset (like property) at a specific price within a defined time frame |
| Rebates | a partial refund to someone who has paid too much money for tax, rent, or a utility. |
| Residual Value | the estimated remaining worth of an asset at the end of its useful life. |
| Secured Loan | a type of loan where the borrower pledges an asset as collateral to guarantee repayment. |
| Trade-In Value | the amount a dealership offers for your used vehicle when you trade it in towards the purchase of a new or used car. |
| Unsecured Loan | a loan that's not backed by collateral, meaning the borrower doesn't need to pledge any assets like a car or home to secure the loan. |
| Upside Down | a situation where the outstanding balance of a loan is greater than the current market value of the asset securing the loan. |
| Variable Rate Loan | a loan where the interest rate can fluctuate over time, typically based on a benchmark rate or market conditions. |
| Warranty | a statement made by an obligor in a loan or security document about themselves or the circumstances surrounding the debt or security. |
Created by:
Sbowers26
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