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Collateral
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Any asset (such as a car) that guarantees repayment of a loan. The borrower risks losing the asset if the loan is not repaid according to the terms of the loan contract.
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Lemon Law
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This term refers to the law that protects consumers from receiving a defective vehicle. There are several factors that must be determined before finding out if a vehicle qualifies for return under the Lemon Law. These vary from state to state, and can usually be determined by a consultation with an attorney in your state. In some states leased vehicles are not covered under the Lemon Law because the lessee does not technically own the vehicle.
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Open-End Lease
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A lease which may involve a balloon payment at the conclusion of the lease term. The balloon payment is based on the value of the property when it is returned.
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Rim Width
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The distance measured from the front lip of a rim to the rear lip, also known as the rim's inner and outer flanges.
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Amortization
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Refers to the payment of an interest-bearing liability over a series of payments or installments, rather than payment in one lump-sum.
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Prepaid Lease
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A prepaid lease refers to a lease that contains no monthly payments; instead the lessor pays all monthly payments, down payments, taxes, fees, and insurance at lease signing, thereby eliminating the need for a monthly payment. This is sometimes referred to a single-payment lease, and it typically saves the lessee money by eliminating any interest charges and finance fees.
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Torque
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The amount of momentum or force that the vehicle produces at the drive axles. The higher the torque, the more powerful a vehicle is.
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Crown
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The entire outer perimeter of the contact surface of a tire. This area houses the tread pattern of a tire.
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Captive Finance Company
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This term refers to a separate company, owned by an automobile manufacturer, used to finance products, usually for that manufacturer but also sometimes for other manufacturers as well. Examples include Ally, formerly GMAC, which now provides financing for Chrysler and General Motors. Ford Motor Credit is another example of a captive finance company.
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Third Party Claim
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Refers to claims for damage to property or person by a third party when the insured has been alleged to be the cause of the incident or occurrence.
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Multi-Car Discount
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Discount offered if a policyholder insures more than one vehicle with the same insurer.
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Vandalism
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Refers to the intentional destruction or defacement of vehicles and property.
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Lugnut
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The nut that is threaded onto the lug to secure a wheel to a vehicle. Different vehicles have different numbers of and bolt patterns for their lugs.
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Tire Pressure
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Also called psi, this refers to the amount of air within a tire.
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Traction Break
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This describes the act of a tire briefly losing traction with the surface of the road.
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Destination Fee
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Whereas the prep fee is the fee charged by dealerships to get the vehicle ready for lease, the destination fee is the charge from the manufacturer for getting the vehicle to the dealership. This fee is typically installed into the overall Manufacturer's Suggested Retail Price (MSRP). Fees can range from $300 to over $1,000 depending on where the vehicle comes from and the location of the dealership.
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Lease Online
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This is a term that refers to a consumer's ability to utilize the Internet to negotiate a lease deal without setting foot in the dealership. Many dealerships utilize video chat software and pin-number identification for consumers who wish to do business over the Internet. It is also an easier way for all three parties involved (the lessee, the dealership, and the leasing company) to communicate in one place. Many consumers are still concerned over security issues on the Internet, and are not fully trusting of the online leasing option.
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Curb Guard
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This is a band of thick rubber that juts out from the sidewall of a tire to protect it from damage in the instance of the tire hitting or rubbing up against the curb.
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Mixing Tires
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This refers to the act of mixing different brands, sizes, or models in the front or rear of a vehicle.
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Lease Term
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The lease term is the amount of time the lease is extended for. It is most commonly figured in months, and includes a monthly payment. Lease terms can vary from dealership to dealership and manufacturer to manufacturer. The most common lease terms occur at 24, 36, 39, 48, and 60 months. The longer the term, the lower the payments in most cases. However, most consumers like to keep the terms within the warranty limits of the vehicle, so as to no be responsible for payments and repairs at the same time.
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