Finance Basics
Has the authority to act as an account holder
What is Power of Attorney?
A person who agrees to lease the vehicle and is primarily responsible.
Who is the Lessee?
A type of loan that accrues interest on a daily basis based on the outstanding principal balance.
What is Simple Interest?
A fee the lessee is charged if they go over the Mileage Allowance listed in the lease agreement.
What is Excess Mileage?
To end the lease early or at maturity.
What is Termination?
A fee, specified in the lease contract, payable at lease-end if the lessee does not purchase the vehicle.
What is Disposition Fee (Turn-in)?
Estimated value of the vehicle at the end of the Lease term.
What is Residual Value?
A Person who is responsible for repaying a retail loan.
Who is the Buyer?
The total amount of money borrowed not including interest.
What is Principal?
The length of the loan or lease, usually broken down into months.
What is the Term?
A formal written application on request for credit.
What is a Credit Application?
Wear and tear/use on a leased vehicle in excess of that allowed per the lease agreement.
What is Excess Wear & Use (EWU)?
Contract signed for retail and balloon products.
What is a Retail Installment Sales Contract?
Form of taxation on personal property including motor vehicles in various states.
What is Property Tax?
Contract signed for leased products.
What is a Lease Agreement?
A yearly rate of interest (Annual Percentage Rate).
What is Annual Percentage Rate (APR)?
Lump sum payment at the end of the lease.
What is a Balloon Payment?
A person who is jointly responsible for repaying a retail loan.
Who is the Co-Buyer?
The dollar amount due each month to repay the credit agreement.
What is the Monthly Payment?
Any termination of a lease, whether by the lessee or by the company (e.g., repossession), before the due date of the final scheduled monthly payment.
What is Early Termination?
The cost of borrowing money from a lender.
What is a Finance Charge (Interest)?
A person who agrees to lease the vehicle and is jointly responsible.
What is Co-lessee?
The reduction in the value of the vehicle over time due to normal wear and use.
What is Depreciation?
Tax paid on goods and services. Can be paid monthly or upfront.
What is Sales Tax?
A method the dealer uses to report the return of a leased vehicle.
What is Grounding?