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Major Purchase
--Finance
| Term | Definition |
|---|---|
| Acquisition Fee | A charge in most lease deals that covers a range of administrative or insurance costs, such as credit report acquisition, insurance verification, data processing, and risk coverage for potential leasing losses |
| Closed End Lease | A closed-end lease is a vehicle or equipment contract with fixed monthly payments with no end-of-term risk, provided you stay within mileage and wear guidelines. |
| Collateral | Collateral is something pledged as security for repayment of a loan, to be forfeited in the event of a default. |
| Dealer Incentives | Dealer incentives are financial benefits, rewards, or discounts offered by vehicle manufacturers (OEMs) to dealerships to motivate them to meet sales targets, clear inventory, or promote specific models |
| Default | A default is the failure to fulfill a legal or financial obligation (such as loan payments |
| Deficiency | Deficiency is a lack or shortage. |
| Depreciation Fee | A depreciation fee is the amount of an asset's cost assigned to a specific period, reflecting its loss in value. |
| Early Termination | Early termination is the cancellation of a contract, lease, or agreement before its scheduled end date |
| Finance Charge | A finance charge is the total cost of borrowing money or buying on credit, expressed as a dollar amount. It includes interest, service fees, and other transaction costs imposed by a lender |
| Fixed Rate Loan | A fixed-rate loan is a type of loan or mortgage where the interest rate remains constant for the entire duration or term of the loan |
| Inception Fees | Inception Fees is the upfront costs, charges, or initial payments required to be paid at the very beginning of a contract, lease, or financial agreement |
| Installment Loan | An installment loan is a type of credit where a borrower receives a lump sum of money upfront and repays it through fixed, scheduled payments (installments) over a set period. |
| Invoice Price | The invoice price is the initial amount a manufacturer or distributor charges a retailer/dealer for goods |
| Lease | a lease is 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 | the lessee is The individual who rents property from its owner |
| Lessor | A lessor is a person who leases or lets a property to another; a landlord. |
| Mileage Allowance | A mileage allowance is a set amount of money reimbursed to an employee or individual per mile for using their personal vehicle for business, medical, charitable, or moving purposes. |
| Mileage Charge | Milage charge is a car rental charge applied if allowed miles are exceeded in a rental agreement. |
| Money Factor | money factor is a term used in car leasing to represent the cost of borrowing money, effectively serving as the interest rate on a lease |
| MSRP | MSRP stands for Manufacturer's Suggested Retail Price |
| Open End Lease | A contract where the cost due at the end is dependent on the difference between the projected worth of the leased property and its actual value at that time, allowing for potential refunds if the actual value exceeds the projected worth |
| Purchase Option | A purchase option is a contractual agreement that grants a party the right—but not the obligation—to buy a specific asset (property, shares, equipment) at a predetermined price within a specified timeframe |
| Rebates | A rebate is a return of a portion of a purchase price or a refund of money already paid, often serving as an incentive, discount, or tax adjustment |
| Residual Value | Residual value is the estimated,, fair market value of an asset at the end of its lease term or its useful life |
| Secured Loan | A secured loan is a type of loan that is backed by collateral |
| Trade-In Value | Trade-In Value is the valuation or allowance given for a used article as part payment for a new one. |
| Unsecured Loan | An unsecured loan is a type of credit or loan that is not backed by collateral |
| Upside Down | Upside Down means that you owe more on a loan (such as a mortgage or auto loan) than the asset itself is currently worth |
| Variable Rate Loan | Variable Rate Loan is a financing product where the interest rate can fluctuate over the term of the loan. |
| Warrant | a warrant is a derivative security that gives the holder the right—but not the obligation—to buy or sell an underlying security, usually equity (stock), directly from the issuing company at a fixed price (the strike price) within a specific timeframe. |
Created by:
Helll
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