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Adverse Action
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Refers to the refusal by a lender to grant credit to an applicant either in the amount or according to the terms requested.
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Rain Groove
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A tread pattern designed specifically to channel water away from the tire footprint during driving.
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Free Car Lease
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This is the term that refers to a leased vehicle being given to another person. The lessee allows another person possession of the leased vehicle for the entire lease term, at which point the vehicle must be returned. Free car leases are most common among company promotions, gift items, and contest winners. Most of the time the lessee picks up the tab on all maintenance, insurance, and fees.
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Before-tax Income
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Amount of money an individual earns before taxes (federal and state) are deducted. Also called Gross Income or Gross Monthly Income.
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Finance Company
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An organization or institution that finances consumer purchases repayable in installments.
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Passenger Tire
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A type of tire manufactured specifically for use on passenger cars. These tires are not recommended for use on heavy trucks, vans, or vehicles larger than midsize crossover SUVs.
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Acquisition Fee
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This is a fee that is included in all lease deals. This is also called an initiation fee, and it is usually charged by the lease company, not the dealership. Since dealers do not control this fee, they typically have no say in the cost. Hence the fee is branded as non-negotiable. These fees start in the range of $300-$350 and rise from there. This fee is not usually itemized in a lease statement; it is instead listed as part of the gross capitalized cost.
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Towing and Labor Coverage
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This coverage pays for out-of-pocket expenses in the case of the policyholder's car breakdown or flat tire.
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Blue Book Value
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This refers to the determined value of a vehicle as judged by Kelley Blue Book. Many dealerships use Kelley as the standard in determining overall vehicle value; however, Kelley is not the only used car guide published, and values due tend to vary from guide to guide. The National Automobile Dealers Association (NADA) is another corporation that publishes a used-car value guide. Which guide used is typically determined by the lending institution or dealership leasing the vehicle.
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Industrial
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A tire classification that includes pneumatic and non-pneumatic tires built for heavy-duty industrial equipment.
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Trade-in
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A vehicle turned in to the dealer in exchange for an amount credited toward the purchase of a new or used vehicle.
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Breaking a Lease
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This is the term used when describing the termination of a lease before its contract end date. Every lease is scheduled for a certain number of months, though contract lengths do vary from manufacturer to manufacturer. Terminating the agreement before all of the contract months have passed, no matter what the reason, is considered breaking the lease. If a lease is broken, penalty fees, interest, and a balance due is usually required by the lease company.
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Euro-Metric
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The standard of tire measurement in the European-developed system. It utilizes the same numbering scheme as P-metric tires, it simply leaves the P off the measurement. For example, a P-metric tire with a size of P235/75R15 would be written as simply 235/75R15 in the Euro-metric scale.
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Point-of-Sale (POS)
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Refers to a loan payment method where the borrower can choose to have payments electronically debited from their checking account, thus eliminating the need for checks.
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Adjuster
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A person who investigates and settles losses on an insurance claim.
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Peril
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Dangers or hazards that may cause a loss, such as a fire or automobile collision.
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Margin
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The amount of profit a dealer makes on the sale or lease of a vehicle.
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Base Price
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Term refers to the cost of the vehicle before any options are added. Also called MSRP and Sticker Price.
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Named Insured
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The first person in whose name the insurance policy is issued.
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Credit Life Insurance
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A life insurance policy, which can be purchased at the time of sale, that will pay off the remainder of the vehicle loan should the borrower die unexpectedly.
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