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Manufacturer Rebate
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See rebate.
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Legal Liability
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This refers to liability that is imposed by law, rather than that arising from an insurance agreement or contract.
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Indemnity
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Refers to a principle of insurance providing that when a loss incurs, the individual insured should be restored to his/her approximate financial position prior to the loss.
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Destination Charge
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This is the charge added to the dealer invoice to cover the shipping, freight or delivery (moving the vehicle from the auto manufacturer to the dealer), sometimes referred to as DFC.
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Replacement Cost
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The cost of replacing property without any reduction for depreciation. Using replacement cost method of determining value, damages for a claim would be the amount required to replace the vehicle.
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Mark-up
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Term refers to the dealer's profit on a vehicle; the selling price subtracted from the amount of the dealer invoice.
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Option Code
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All options on a vehicle have codes that help dealers make up option packages. Option codes may be listed on the spec sheet.
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Select Repair Shop
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Insurance companies have a preferred list of repair facilities that a claimant can take their vehicle to without an inspection by an adjuster assigned to the claim. The insured, however, always has the choice of which repair facility to use, even if it is not on the insurance company's preferred list.
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Comprehensive Automobile Insurance
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Also called comprehensive coverage. This is coverage that protects the polichholder in the event of any damage to his/her vehicle that did not involve a collision. This includes vandalism, theft, and fire.
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Salvage
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Refers to the process of retrieving and reconditioning damaged vehicles in order to reduce the amount of an insured loss. Salvaged vehicles must be identified as such.
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Deductible
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A dollar amount that the insured is obligated to pay on each loss occurrence to which the deductible applies. After the deductible is met, the insurance company pays the rest of each covered loss up to the limits of the policy.
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Fair Market Value
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Term refers to the price a buyer is willing to pay for a product at any given point in time in the marketplace. Also called fair price, that which is reasonable, customary, and that the buyer will pay.
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Late Payment
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Refers to a payment that is received after the due date and any grace period.
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Premium
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The amount to be paid for the insurance policy. Can be paid according to different payment plans through the insurer, typically monthly, quarterly, six-month or annually.
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Balloon Payment
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Refers to a large payment that is due at the end of a loan. Using a balloon payment option can reduce the amount of individual monthly payments but is not a popular payment method. Failure to pay the amount due at the end of the loan can result in repossession of the vehicle and a black mark on the borrower's credit history.
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V10
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This is the term which refers to a V-shaped engine with ten cylinders total, five per bank lined up in a row. V10 engines have two separate cylinder heads.
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Anti-Theft Device
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An active or passive device that attempts to prevent theft of a vehicle. Active anti-theft devices can track and recover a stolen vehicle. Passive anti-theft devices work to prevent theft by use of electronic alarms, simple steering wheel locks, etc.
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Automatic Transmission
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This refers to a particular type of transmission which shift automatically, without the aid of the driver. Automatic transmissions are operated by way of a shift knob in the vehicle's cabin.
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Insurance Card
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Also called insurance ID card. Issued by the auto insurer, the insurance card contains basic information about the insurance policy. In many states, an insurance card is required to be kept in the vehicle at all times.
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Motor Vehicle Report (MVR)
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A record held by the state containing licensing status, violations, suspensions and other infractions a driver has had over the last several years. Auto insurance companies use the MVR as one of many factors to fairly determine a policy premium, based on the probability the policyholder will have a future claim.
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