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Document Handling Charge/Prep Fee
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A negotiable fee charged by the dealership for handling all of the documentation and paperwork necessary to complete the sale.
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Loan
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Money lent to a borrower that must be repaid over a specified period of time.
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Binder
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A temporary insurance contract that provides coverage until a permanent policy is issued by the insurer.
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Rate
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Refers to the annual rate of loan interest, expressed as a percentage of 100.
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Certificate of Satisfaction
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A form that the insured signs upon taking delivery of the car from the repair facility. The form certifies that the insured is satisfied with the vehicle's operation, appearance, and visible quality of the repairs.
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MSRP
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This is the acronym for Manufacturer's Suggested Retail Price. This is the price that the manufacturer suggests the dealer sell the vehicle for, but it is not a set-in-stone figure. This figure is the starting point for negotiation, and plays a large role in determining the cap cost. Options, model trims, and amenities can change the MSRP.
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APR
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See Annual Percentage Rate.
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Commercial Lease
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This term is used to describe a vehicle that is being leased for use strictly by a business. Generally, leasing a vehicle is more beneficial for a business since the leasing company actually maintains ownership of the vehicle. It provides tax advantages in the fact that several areas of the lease may be deducted from the business's taxes, such as insurance, maintenance, payments, and repair not covered by the vehicle's warranty. Also called a business lease.
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Estimate
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An assessment of the cost to repair damaged property.
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Driver Training Discount
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Discount offered for people who have taken an approved driver training course. This type of discount is not available in all states or for all individuals.
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Money Factor
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The money factor is the small number, typically a fractional number written in decimal form (e.g. - 0.0028), that is used to determine the lease fee and monthly payment on a particular lease. The lower this number, the better it is for the consumer. According to the Consumer Leasing Act a lessor is not required by law to release the money factor, however a lessee can request it prior to signing the lease. An example of the money factor at work would be if you have a money factor of 0.00268, you would simply multiply the money factor by 2,400 to arrive at your equivalent APR (i.e. - 0.00268 x 2,400 = 6.432 or 6.4%).
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PSI
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The acronym for Pounds per Square Inch. This refers to the measurement of air within a tire, and is measured by the amount of outward force extended by the air within the tire.
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Interest Rate
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All financed money is given at a certain interest rate, and leases bear no difference. The one difference is in how it works with a lease. The interest rate of a lease is also referred to as the money factor. It is always expressed as a very small decimal, and must be multiplied by 2,400 to arrive at an equivalent APR. Since there is really no money being lent to the lessee, the interest rate is more of a depreciation fee. For example, if you have a money factor of 0.00268, you would simply multiply the money factor by 2,400 to arrive at your equivalent APR (i.e. - 0.00268 x 2,400 = 6.432 or 6.4%).
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Payment Protection Plan
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A form of insurance that protects the borrower in the event the borrower cannot make the payments due to financial hardship or unexpected circumstances.
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I6
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This is the abbreviation for the term Inline Six, which refers to an engine with six cylinders lined up in a row. Inline engines typically have one cylinder head.
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Credit
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Term refers to a written agreement in which the borrower receives something of value, such as a car, in return for a promise to repay the lender at a later date. Also called buying on credit.
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Insurable Risk
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A risk that meets the ideal criteria for efficient insurance. The concept of insurable risk is the foundation of nearly all insurance decisions.
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Mp3 Input/Mp3 Compatible
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A technology that allows the vehicle's radio to play mp3 sound files from a CD, mp3 player, iPod, or other electronic radio device.
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Carrier
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Refers to the insurance company or insurer.
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Tax
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This is a percentage of the final sales price of a vehicle that is required by law to be paid to local, state and/or federal entities.
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