|
Word |
Definition |
|
|
|
Consumer Leasing Act
|
The Act put into effect by the United States Congress, effective January 1, 1998, which requires all lessors and lease companies to disclose all leasing costs in the lease agreement. Also known as Regulation M, this act protects the consumer from any hidden costs that can be worked into lease agreements.
|
|
|
Offset
|
This is the distance, typically measured in millimeters, from the hub mounting surface of a rim to the centerline of the tire mounted on the rim.
|
|
|
Depreciation Fee
|
This is a fee that is typically the main component in the monthly lease payment. The depreciation of a vehicle for the lease term is decided by finding the vehicle's residual value at lease termination. This depreciation is divided by the number of months in the lease, and then added to the money factor to find the total monthly lease payment. For example, you purchase a vehicle with a price of $28,000. The Automotive Lease Guide lists a residual value of $13,500 at lease end. The difference, $14,500, would be divided among the number of months of the lease. This figure can be lowered with a lower gross capitalized cost.
|
|
|
Non-Prime Lender
|
Refers to financial institutions that provide credit to borrowers with a history of bad credit, no credit, or credit problems. Non-prime lenders assume greater risk and charge higher interest rates to compensate for the increased risk with this type of borrower.
|
|
|
Term
|
The number of monthly payments on an auto loan or lease.
|
|
|
Cargo Capacity
|
This is the amount of space, measured in cubic feet, that your vehicle will hold in its cargo areas. Cargo areas can include the trunk, behind the rear seat in hatchbacks, or the entire interior space of a minivan or SUV with the rear seats removed.
|
|
|
Monroney Sticker
|
Refers to the actual sticker that appears on a car's window, listing the vehicle's base price, any manufacturer-installed options, the manufacturer's suggested retail price (MSRP), destination charge, and fuel economy numbers.
|
|
|
Rental Reimbursement
|
A common auto insurance rider that pays for the cost of a rental vehicle if the policyholder's vehicle is damaged or stolen.
|
|
|
Assured
|
The insured, the policyholder, or someone who has an insurance policy.
|
|
|
Endorsement
|
Any change, addition or exclusion to the original policy, such as adding a driver, vehicle, changing address or modifying limits or deductibles.
|
|
|
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.
|
|
|
Non-Disclosure
|
This is the term that refers to a situation when a company or organization does not disclose all information regarding a lease. This information can include any fees, taxes, charges, or lease terms that will govern the lease of a particular vehicle. Under the Consumer Leasing Act non-disclosure is illegal when dealing with leases.
|
|
|
Mileage Allowance
|
The mileage allowance is the amount of mileage allotted by the lessee that the leased vehicle can be driven during the duration of the lease. This mileage is usually equal to 1,000 miles per month, however in some instances the lessee can purchase additional miles at lease signing. Any mileage on the vehicle over the mileage allowance at lease turn-in will usually be met with stiff penalties and fees.
|
|
|
Principal
|
Refers to the amount to be financed, and the amount the borrower will be paying interest on. The principal is the amount of money before interest is charged. For example, if the purchase price of the vehicle totals $30,000 after any downpayment, $30,000 is the principal, the amount to be financed and against which interest will be charged.
|
|
|
Payment Recovery
|
Also called subrogation. After an insurance company pays out on a claim that was determined to be the fault of another party, it will seek reimbursement from the other party's insurance carrier for all monies paid out as well as for your deductible.
|
|
|
List Price
|
Refers to the Manufacturer's Suggested Retail Price (MSRP), or what the manufacturer suggests as the retail price of the vehicle. Also called Sticker Price.
|
|
|
Tread Depth
|
The distance from the top of the tread blocks, or crown of a tire, to the bottom of the tread grooves. It is measured in thirty-seconds of an inch and it displays the amount of tread life left on the tire.
|
|
|
Bodily Injury
|
Any injury to the body resulting from an auto accident, usually in a collision. Also refers to that portion of auto insurance coverage, i.e. Bodily Injury Liability Coverage.
|
|
|
Side Knee Airbag
|
An airbag that deploys from the panel directly next to the driver's knee, protecting it from being crushed in the event of a major collision.
|
|
|
Bead
|
This is the innermost rim of a tire on either side, where it seats to the rim. A bead is reinforced with concentric steel wires to ensure a tight seal against the rim. It also prevents damage to the tire during installation and removal.
|
