Car Glossary

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Word Definition
Bankrupt Refers to a person, company or organization that, though a court proceeding, is relieved from payment of all debts after surrendering all assets to a trustee appointed by the court.
All-Risks Policy Refers to a type of policy that promises to cover all losses, except those specifically excluded in the policy.
RWD An acronym for Rear Wheel Drive. This describes a vehicle that utilizes the rear wheels as the main drive wheels for the vehicle.
Commission This is the amount of money the salesperson receives from the sale of a vehicle. Most automotive salespeople are paid strictly on commission.
Term Refers to the period of time covered in the contract. For example, in a three-year fixed loan, the term is three years or 36 months.
Light Truck Tires A type of tire manufactured specifically for use on light trucks. These tires are not recommended for use on heavy-duty trucks, vans, or vehicles larger than 3/4-ton pickups. These tires are typically labeled by an LT after the size.
Studded Tires Certain tires that come with small metal studs embedded into the tread blocks, or holes where studs can be manually inserted, to provide better traction in inclement driving conditions.
Qualify Refers to a borrower's ability to meet the lender's specified criteria for granting credit.
Open-end Lease An open-end lease requires the lessee to pay the difference between the vehicle's actual value and its residual value at lease end. This amount is referred to as the deficiency. In an open-end lease, a lessee is required to pay the deficiency or to purchase the vehicle for the residual value at lease end. These leases are not as common because they are less advantageous than closed-end leases.
Lease Residual The term lease residual is another way of saying residual value. This is the value that is the main variable in determining the overall payment of the vehicle. The residual value of a vehicle is its determined value at lease end. This figure is found at the beginning of the lease by consulting the Automotive Leasing Guide, the prime source for determining residual values.
Center bore The hole in the center of a rim. Center bore's come in different diameters to allow for proper alignment of a rim onto a vehicle hub. Hub rings are used to improve the fit of a rim by adapting a larger center bore to a smaller hub center.
Medical Payments Coverage Coverage that pays for reasonable medical expenses, or death benefits, to the policyholder or any other person covered under the policy in the event of an accident, regardless of who's at-fault.
Underinflation The act of not filling a tire completely to its recommended psi capacity. Underinflation can lead to improper wear, tire damage, and a higher risk of damage to the rim and suspension parts.
TPMS The abbreviation for Tire Pressure Monitoring System, this is an electronic system that utilizes sensors within the tires to constantly monitor tire pressure and alert the driver of improper inflation.
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