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Personal Injury Protection
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Also called PIP insurance. This is coverage that provides for the treatment of injuries to the driver and passengers of the policyholder's vehicle.
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Commercial Truck Lease
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This term is used to describe a truck that is being leased for use strictly by a business. Generally, leasing a vehicle is more beneficial for a business since the leasing company actually maintains ownership of the vehicle. It provides tax advantages in the fact that several areas of the lease may be deducted from the business's taxes, such as insurance, maintenance, payments, and repair not covered by the vehicle's warranty. A truck lease differs from a standard commercial lease in the fact that it typically allows for a different residual value of the truck at lease end, providing more incentive for the lessee to purchase at lease end; also, mileage and wear-and-tear charges are usually lowered on commercial truck leases. Also called a business lease.
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Book Value
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Published valuation of a vehicle. Three nationally-recognized vehicle evaluation services are NADA, Kelley Blue Book, and Black Book.
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Alternative Fuel
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Alternative fuel vehicles are vehicles which run on resources other than standard gasoline. This can include hybrid, diesel, hydrogen-powered, and ethanol vehicles.
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Disposal Fee
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This is the fee that is charged at the end of a vehicle lease, typically a closed-end lease, for a consumer who wishes not to purchase the vehicle. This fee includes any administrative charges, prep fees, penalties, and interests that the dealership or lease company adds, and is usually negotiated in the lease contract. The lessor may or may not apply your down payment to this fee, but it should be stated in the lease agreement either way. Also referred to as a disposition fee.
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APR
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Annual Percentage Rate. This is the acronym which explains the amount of interest you'll be paying on your vehicle loan. It is accrued annually.
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Repossession
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When a borrower defaults on a loan or lease, the creditor may take possession of the vehicle, a process called repossession.
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Adverse Carrier
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Refers to the other person's insurance company.
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Manufacturer
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Refers to the company that produces, builds or assembles and markets the vehicle.
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Dealer Charges
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The amount the dealer charges for extras such as extended warranties and other services or additional products for a vehicle.
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Broker
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Insurance salesperson that searches the marketplace for coverage for clients, not insurance companies.
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Make
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The manufacturer of the vehicle (i.e. - Ford, Honda, Toyota, etc.)
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Rolling Resistance
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This describes the amount of resistance due to friction and the deformation of the tire's contact with the road that a tire exhibits during travel.
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Automotive Lease Guide
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Also referred to as the ALG, the Automotive Lease Guide is the industry standard for finding residual values. Many of the depreciation fees charged by lease companies are based on the ALG.
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Collision Coverage
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An optional (typically) policy component that covers any damage to the policyholder's car that is the result of a collision.
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Commission
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The portion of an insured's premium that is paid to the agent as compensation for his/her services.
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Depreciation
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Term that refers to the decline in the value of property, such as an auto, over time.
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Asymmetric
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This refers to a particular type of tire tread design. The tread pattern is different on either side of the tire, meaning it is non-directional.
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Simple Interest
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A method of calculation of interest that is due arrived at by applying a periodic rate to the balance outstanding on a daily basis. Payments received are applied first to the accrued interest, then to the principal amount.
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Rent Charge
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Also referred to a lease fee, the rent charge is basically the same as the implied interest. It is found by way of the money factor, and it is factored into every vehicle lease payment.
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