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Common Car Loan Terms
Acquisition fee
A charge included in lease transactions that is paid up front or is
included in the gross capitalized cost. It could be called a bank fee, an
administrative fee, or an assignment fee.
Amortized amounts
Amounts such as taxes, fees, charges for contracts, payments for insurance, and
any credit or lease balance that are included in the gross capitalized cost and
are paid as part of the base monthly payment.
Appraisal fee
The charge for estimating the value of property that is used as security.
What if I have bad credit?
Past credit problems can pose difficulties but many people have been financed
through online programs even though they had less than perfect credit ratings.
Bankruptcy
A legal process in which a debtor has his debts erased or reorganized.
Broker
An entity that arranges sale or lease of vehicles through another party.
Collateral
Property used to guarantee a loan and subject to seizure if you default.
Credit scoring system
A statistical system used to rate applicants on criteria related to
creditworthiness.
Dealer Charges
Charges for extra services and products sold by the dealer.
Dealer preparation fee
A fee charged by dealers that covers the expenses of preparing a vehicle for
lease. The dealer could be reimbursed by the manufacturer for this expense.
Lease term
The period of time for which a lease agreement was written.
Loan to Value Ratio - LTV
A ratio determined by dividing the sales price or appraised value into the loan
amount ( in a percentage).
Monthly payment
This term may refer to one of two required disclosures.
Security deposit
An amount you may be required to pay, that may be used by the assignee in the
event of default or at the end of the lease to offset any amounts you owe under
the lease agreement.
Used vehicle leasing
Leasing of previously owned or driven vehicles.
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