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Purchase Option
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A lease term that describes the consumer's right to purchase the vehicle at the end of a lease term, at a stated price.
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Tire Rotation
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The act of swapping tires from front to back or criss-crossing them to increase treadlife. This alternates the tires from the drive wheels to the non-drive wheels.
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Add-Ons
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These are products or services sold by the dealer and tacked on to the purchase price of a vehicle. Examples include rustproofing, extended warranties, upholstery treatments, and others. Usually add-ons are an expensive addition, priced higher than the customer could obtain elsewhere. They are very profitable for the dealer.
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Lapse
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Also called lapse in coverage, refers to that point where the policy is canceled or terminated for failure to pay premiums or when the policy is declared void for other reasons.
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Physical Damage
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Damage to a covered vehicle that may arise from perils such as collision, fire, vandalism, theft and any other perils listed on the policy's coverage declarations page.
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Overinflation
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This describes a tire that has been inflated with air beyond its recommended psi. Overinflation can lead to improper wear, tire damage, and a higher risk of blowout.
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Lease Swap
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Also referred to as a lease exchange, 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 swap can occur between private parties, businesses, and financial or rental institutions. Many private consumers offer a lease swap as a way to get out of a lease they are unhappy with, or a vehicle that they dislike.
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Policy Change
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Changes made to the policy while it is currently in effect.
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Insurance Fraud
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Refers to falsifying or exaggerating facts of an accident to an insurance company to obtain payment for claims that would not otherwise be made. Insurance fraud examples include inflated medical bills, exaggerated injuries, and accidents that are staged.
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Lease
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A method of financing a vehicle that allows the borrower the use of the vehicle for a specified period of time (usually expressed in months), in exchange for making payments to the leasing company. In a lease, the leasing company continues to own the vehicle and it generally must be returned to the leasing company upon the lease conclusion, although the lessee may opt to buy the vehicle at lease-end, if applicable.
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P-Metric System
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The standard of tire measurement that describes the tread width, aspect ratio, and rim diameter of a particular tire. It is signified in the measurement by the use of the letter P at the beginning.
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Promise to Pay
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Refers to the agreement by the borrower to repay the current payment amount and the date by which it will be paid.
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Centrifugal Growth
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Centrifugal growth describes the growth in diameter that a tire exhibits at high speeds, due to centrifugal force. High centrifugal growth can lead to improper wear, an incorrect speedometer reading, and could cause the tire to rub against body or suspension parts. Manufacturers reduce centrifugal growth with belt strength.
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Medical Payments Coverage
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Coverage that pays for reasonable medical expenses, or death benefits, to the policyholder or any other person covered under the policy in the event of an accident, regardless of who's at-fault.
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Tire Size
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The measurements of a tire. The three numbers in the measurement describe the tire's width from sidewall to sidewall in millimeters, the aspect ratio of the sidewall, and the overall diameter of the rim in inches.
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Wear Bar (Wear Indicators)
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Slightly raised rubber strips that run along the tread grooves. These give a better indication of when a tire is approaching the end of its tread life.
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Rate
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Often called a premium, but a rate is actually a reference to base rating units that are used to calculate the final premium for an insurance policy.
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Short-term lease
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This refers to a lease that lasts for less time than the minimum standard of 24 months. Short-term leases are very uncommon and are typically only given to well-known customers of a particular dealership or to businesses.
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Dealer Invoice
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This is the published amount the dealership paid the manufacturer for a vehicle. It may not reflect the actual dollar amount exchanged due to holdbacks, fees, rebates, and incentives.
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Disposition Fee
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This is basically the lease term for a Dealer Prep fee. It's the amount charged on a lease that covers the dealership's costs for preparing the vehicle for sale.
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