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Trade-In
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An item, most commonly another vehicle, which is traded toward the purchase of a new vehicle from a dealership.
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Sticker Price
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Refer to Dealer Sticker Price.
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High-Risk Automobile Insurer
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An insurance company that provides insurance coverage to high-risk drivers.
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Clean Title
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This term refers to a vehicle that possesses a title free of any liens, and does not possess a salvage title. Any brand new vehicle should have a clean title. Any vehicle that had a previous owner should be checked through a third-party agency to verify a clean title.
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Proof of Loss
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Refers to a statement made about the extent of a claim. Proof of loss may be required or requested as a policy condition prior to payment of the claim.
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Service Charge
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Fee tacked on by some creditors or lending institutions, a component of some finance charges. A security interest fee may result when an overdraft checking account is triggered into use.
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Arbitration
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Used as an alternative to litigation, arbitration is a process of settling a dispute through an impartial party.
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Dealer-Installed Option
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Optional equipment on a vehicle that is installed by the dealership, as opposed to the manufacturer.
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Loan Balance
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Amount remaining due on a loan after deducting all payments previously made.
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Credit Card
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A card used to buy goods or services or to borrow money on credit. A new car buyer, for example, may use a credit card as the source for a down payment.
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Transmission
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This is part of your vehicle's drivetrain. It connects directly to the engine and converts the engine's power into torque to drive the vehicle's wheels. The majority of transmissions in automobiles come in automatic, manual, CVT, EVT, and Electric.
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Single-payment Lease
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Also referred to as a prepaid lease, the single-payment lease consists of the consumer providing the money for all down payments, taxes, fees, insurance, as well as all monthly payments, right at the beginning of a new lease. This is not a viable option for many consumers, as the price of automobiles will drive the amount of money needed for a single-payment lease well into thousands of dollars.
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Blue Book
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This term refers to a used vehicle's value as per the Kelley Blue Book user car price guide. It is also referred to as NADA value.
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Direct financing
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This refers to a loan originated directly between the lender and the consumer.
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Title
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Physical evidence (a document) that a person or entity has right of possession. Also see Certificate of Title.
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Adverse Action Notice
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Written document that explains why an individual has been denied credit.
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Discount
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A reduction in the cost of the auto insurance premium. Various discounts are available, for everything from good grades to a vehicle's safety equipment.
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Initiation Fee
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This is a fee that is included in all lease deals. This is also called an acquisition fee, and it is usually charged by the lease company, not the dealership. Since dealers do not control this fee, they typically have no say in the cost. Hence the fee is branded as non-negotiable. These fees start in the range of $300-$350 and rise from there. This fee is not usually itemized in a lease statement; it is instead listed as part of the gross capitalized cost.
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Verification of Employment
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Process of validating the statement of employment a borrower makes on a loan application for accuracy.
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Uneven Wear
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This occurs when a vehicle's alignment is off or a tire is underinflated or overinflated. It describes an uneven distribution of wear across the tire's tread.
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