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major life purchases
| Question | Answer |
|---|---|
| acquisition fee | Acquisition fees are administrative or transaction charges associated with securing a lease |
| closed end lease | is a vehicle or equipment leasing agreement where the lessee makes fixed monthly payments |
| collateral | an asset a borrower pledges to a lender to secure a loan, which the lender can seize if the loan is not repaid. |
| dealer incenrives | hidden, manufacturer-to-dealer rebates designed to lower a dealer's cost of purchasing vehicles |
| default | a failure to fulfill a legal or financial obligation |
| deficiency | an inadequacy, shortage, or lack of a necessary component, element, or amount |
| depreciation fee | Depreciation charges are the systematic allocation of a tangible asset’s cost over its useful life, |
| early termination | dissolution of a contract or agreement before its scheduled expiration date |
| finance charge | total cost of borrowing money, encompassing interest, fees, and penalties, typically expressed as a dollar amount |
| fixed rate loan | interest rate remains locked for the entire term, ensuring consistent, predictable monthly payments. |
| inception fees | upfront costs paid when starting a car lease, typically ranging from $300 to $1,000+. |
| installment loan | lending product that provides a lump sum of money upfront, which is repaid over a set period through regular, fixed, |
| invoice price | the amount a manufacturer charges a dealership for a vehicle, typically representing the base cost plus factory-installed options. |
| lease | a legally binding contract where a property owner (lessor) grants another party (lessee) |
| 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 | standard deduction or reimbursement rate for personal vehicle use, |
| mileage charge | This rate covers vehicle operating costs, including gas, maintenance, and depreciation |
| money factor | is the interest rate applied to a car lease, |
| MSRP | Manufacturer's Suggested Retail Price |
| open end lease | financing arrangement, common in commercial fleet leasing, where the lessee assumes the risk of the asset's residual value |
| purchase option | a contractual provision allowing a lessee or buyer to purchase an asset or property at a specified price within a designated time frame. |
| rebates | partial refunds paid to consumers after purchasing a product |
| residual value | the estimated worth of an asset—often a car or equipment—at the end of its lease term or useful life |
| secured loan | loan backed by collateral—such as a home, car, or savings account |
| trade in value | the amount a dealership offers for your current vehicle to be applied toward the purchase of a new or used car. I |
| unsecured loan | is a financing option that does not require collateral |
| upside down | with the upper part where the lower part should be; in or into an inverted position. |
| variable rate loan | a loan with an interest rate that fluctuates over time based on an underlying benchmark index |
| warranty | a legally binding contract or promise from a manufacturer or seller to repair or replace a product, or refund money, if it proves defective within a specific time |
Created by:
Hstephens27