Terms with Category Automotive
- Pre-computed Loan — Definition,
- With a pre-computed loan, the interest owed over the life of the loan is calculated using a standard amortization table. After signing for this type of vehicle loan, the borrower is obligated to pay back principal plus the full amount of interest that will accrue over the entire term of the loan.
- Preferred Auto — Definition,
- Auto insurance for those with better driving records.
- Preparation Charges — Definition,
- An additional charge that dealers try to impose on buyers. It represents pure profit for the dealers, who have already been paid by the manufacturer for the cost of preparing the car for sale.
- Private-Passenger Auto Insurance Policyholder Risk Profile — Definition,
- A system for sorting drivers by their driving records and how likely they are to cause a loss for an insurance company.
- Purchase Option — Definition,
- An agreement where a portion of monthly rent can be credited toward the purchase of a property.
- The portion of a vehicle lease that determines how much a lessee pays the lessor at the end of the lease to buy the vehicle. The price is usually the residual value.
- Rebate — Definition,
- A manufacturer's reduction on the price of a car as an incentive to buyers. Rebates appeal to people with no credit or less-than-perfect credit who cannot qualify for the lowest-rate loan. A rebate may also appeal to first-time buyers who don't have a lot of cash for a down payment or another car to trade in.
- Residual Value — Definition,
- The amount agreed upon to represent the value of the car at the end of a lease.
- Security Deposit (sec, sec dep) — Abbreviation,
- In automobile leases, sometimes called reconditioning reserve. An amount, often the same as one month's payment, the dealer holds to be sure that the car will be returned in good condition. It is to be returned, less fees and damage charges, at the end of the lease.
- Service Contract — Definition,
- Also known as extended warranty. A contract that covers certain car repairs or problems after the manufacturer's or dealer's warranty expires. Extended warranties are sold by car manufacturers, dealers and independent companies. With a new car, the extended warranty usually must be purchased by the end of the first year of ownership.
- Standard Automotive Insurance — Definition,
- Auto insurance that covers those with average driving records.
- Sticker Price (RRP, MSRP) — Acronym,
- This shows the base price, the manufacturer's installed options with the manufacturer's suggested retail price (MSRP), the manufacturer's destination charge and the fuel economy (mileage). It is the Monroney label affixed to the car window and is required by federal law. The label may not be removed by anyone other than the purchaser.
- Title Loan — Definition,
- A loan that uses a car as collateral.
- Trade-in Value — Definition,
- The amount that the dealership will credit you for the vehicle you provide as partial or full payment for another vehicle. Amount credited is frequently about 5 percent below the wholesale value of the vehicle.
- Underinsured Motorist Coverage — Definition,
- Auto insurance that covers damages when the other driver in a collision is at fault but does not have sufficient insurance coverage.
- Uninsured Motorist Coverage — Definition,
- Auto insurance that covers collision damages caused by a driver without auto insurance.
- Up-front Costs — Definition,
- The costs that must be paid at the time of signing a car lease agreement. These can include the first month's payment, a refundable security deposit, a capitalized cost reduction or down payment, taxes, registration and other fees.
- Upside-down — Definition,
- A position that consumers find themselves in when the outstanding balance of a loan is higher than the current fair market value of the property purchased with the loan. See also "Depreciation."
- Walk-away Lease — Definition,
- The most common type of car lease, also known as a closed-end lease. The lessee may return the car at the end of the lease term, pay any end-of-lease costs, such as the disposition fee, and the lease agreement is over. In a closed-end lease, the lender assumes the risk of predicting the value of the vehicle (its residual value) at the end of the lease's term. Closed-end lease payments are somewhat higher than open-end lease payments.
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Pre-computed Loan -
Preferred Auto
Preferred Auto
