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Co-Buyer
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Refers to a person who buys a vehicle jointly with another. The co-buyer is jointly liable for the repayment of the debt and retains ownership rights in the vehicle.
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Other Owner
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Refers to another person whose name appears on the collateral title, but who is not responsible for the debt. The other owner signs an acknowledgment that the finance company or lending institution owns a security interest in the vehicle.
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Blue Book
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Sometimes called Blue Book Value or Book Value.
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Uninsured Motorist Coverage
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Coverage that pays for a person's bodily injury and related medical expenses after injury in an automobile accident and the responsible party (other than yourself) does not have auto insurance (an uninsured driver) or cannot be located (hit-and-run).
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Variable-Interest Lease
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A variable-interest lease is a lease that utilizes a fluctuating interest rate, or in lease terms, money factor, to determine the lease payments. Variable-interest leases are less common than fixed-rate leases, and are typically reserved for consumers with low to poor credit.
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Lessee
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The term describing the person who is receiving the vehicle and agreeing to the monthly lease payments. This is another word for the consumer.
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Adjusted Capitalized Cost
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This is the bottom line that determines the overall lease payment. It is product of deducting the capitalized cost reduction from the gross capitalized cost. For example, if the vehicle starts with a negotiated price, including all applicable taxes and fees, of $20,000, and the purchaser provides a $2,000 down payment. There is also a $3,000 manufacturer rebate. The Adjusted Capitalized Cost is now $15,000.
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Policy Term
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The length of time the policy is active and in full force.
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First Party Claims
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Refers to a claim for injury, loss, or damage made by the insured person.
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Liability Insurance
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Also called liability coverage. Coverage that provides protection for the policyholder from claims arising from damage or injuries to other people or property.
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Damage
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Loss or harm to a person or property.
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Passive Restraint System
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Refers to a system in a passenger vehicle that increases driver/passenger safety and does not require any manual operation. Airbags are an example of a passive restraint system.
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Down Payment
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The amount paid by the lessee at the time of signing. Down payments may be given in the form of cash, check, rebate check, cash back, credit card, or waved by the leasing company or dealership. Down payments for leases are typically set amounts, put in place by the dealership or leasing company. A large marketing effort resides in the ability of dealerships and lease companies to offer no down payment leases.
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Renewal Date
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Date on which a policy renews, if premiums are paid and the policy has not been cancelled by the insurer.
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Excessive Wear and Tear
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This is the term that refers to any damages or changes to a leased vehicle which the leasing company finds to be abnormal or unreasonable. These changes should be clearly defined in the lease agreement before either party signs. There are times when these changes are negotiable, and they can be changed at lease signing. For example, paint chips may seem inevitable to the lessee, but not the lessor. This is an issue that would need to be addressed before the lease signing takes place.
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Assigned Risk
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Refers to an individual and insurance through a state-assigned risk plan A person who is classified as assigned risk cannot qualify for auto insurance in the regular market. A state-assigned risk plan specifies that each auto insurance company must accept a proportionate share of such drivers/vehicle owners.
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Installment Plan
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This is a method of purchasing an auto or other property on credit, and involves the borrower to make payments at pre-determined intervals for a certain period of time specified in the contract.
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Credit Scoring System
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Term refers to a statistical system that is used to rate the creditworthiness of applicants for credit. Makes use of various characteristics of creditworthiness.
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Load Sensitivity
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Load sensitivity refers to the reaction of a tire to a load. It refers to the coefficient of friction as compared to the vertical load amount.
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Speed Rating
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A rating system designed to describe the maximum speed capability of a tire. It is a letter-based system that utilizes the results of tire tests at preset speeds.
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