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Definition |
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Default Charge
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This is the amount of penalty fee if a late lease payment is made.
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Lien Holder
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This is the company or individual that holds a security interest in collateral to ensure a loan's repayment.
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Annual Percentage Rate
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Also called APR. This is the yearly cost of the loan to the borrower. Similar to the interest rate, but the APR also includes other fees and charges so as to reflect the loan's total cost.
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Lane Departure Warning System
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A system that uses video, laser, or infrared sensors to alert the driver to when the vehicle is leaving its lane of travel.
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Lease Exchange
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Also referred to as a lease swap, this is when two parties negotiate to trade leases or simply transfer one or more leases from one party to another. Also referred to as a lease assumption, the lease exchange can occur between private parties, businesses, and financial or rental institutions. Many private consumers offer a lease exchange as a way to get out of a lease they are unhappy with, or a vehicle that they dislike.
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Down Payment
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The amount of money the consumer puts down on a vehicle that is part of the purchase price but is not financed. The down payment reduces the total amount to be financed or leased.
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Mechanical Breakdown Insurance
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Coverage that pays for the repair of all mechanical parts of a vehicle.
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Joint Underwriting Association
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Also referred to by the acronym JUA, this includes insurers who join together to provide insurance for particular types of risk or size of exposure--especially when there are difficulties obtaining such insurance in the regular market. JUA insurers share in the program's profits and losses.
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Depreciation
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This is the decrease in value of any property due to wear and tear and/or time. Depreciation is generally not an insurable loss.
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Declaration Page
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Page of the auto insurance policy that lists the insurance company, its address, name of the policyholder, starting and ending dates of coverage, and the actual coverage provided in the contract, including covered locations and amounts.
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Competitive Estimate
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Refers to the request by an insurance company for multiple repair estimates.
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Co-Owner
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Refers to a second owner of the vehicle (or property).
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Horsepower
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A unit of measurement that describes the amount of power the vehicle's engine is putting out. One horsepower is equivalent to 550 ft-lbs. per second of force.
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Electronic Funds Transfer
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Also called EFT. An electronic payment method that allows the insured to have his/her premiums paid with automatic deductions from a checking account.
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Underwriting
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Refers to the process of verifying the data on a credit application prior to granting credit approval on a loan.
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Preferred Placement Form
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Refers to a form that a consumer fills out with his/here financial information in order to submit and search for a lender that best suits the prospective borrower's specific credit needs.
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Lien
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Refers to a claim upon a piece of property, such as a car, for payment or satisfaction of a debt or financial obligation.
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Autonomous Cruise Control
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This is the device that allows your vehicle's cruise control to adjust the speed of your vehicle should it become too close to another vehicle. It is typically guided and operated using radar or sonar technology.
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Emergency Road Service Coverage
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Part of an auto insurance policy that pays the cost of having a car towed after it breaks down.
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Holdback
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A credit the dealer receives from the manufacturer for selling a vehicle. This helps dealer profitability and usually consists of 2-3% of the total MSRP. Not all manufacturers provide holdbacks.
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