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Adjusted Capitalized Cost The Adjusted Capitalized Cost is the basis for your monthly Rent Charges on your lease. It is calculated by deducting any Capitalized Cost Reductions from your Gross Capitalized Cost. Application The dealership will have you complete a credit application. This document will ask you for some information about you, including your Social Security number. The dealer and finance companies use this information to review your credit in making their decisions to approve your application. Amount Financed The Amount Financed is the amount of credit that is being provided to you when you purchase and finance your vehicle. Annual Percentage Rate (APR) The Annual Percentage Rate is the cost of your credit as a yearly rate. All creditors are required to calculate the APR in the same manner, making it easier for you to compare the cost of credit. Arbitration Arbitration is a method of resolving disputes by presenting both sides to an independent third party without the need to file a lawsuit.
Capitalized Cost Reduction The Capitalized Cost Reduction is the amount of cash that you pay at the beginning of your lease (such as a down payment) and/or any net trade-in allowance that is applied to reduce your Gross Capitalized Cost. Certain dealer or manufacturer cash or rebate offers can also be applied as Capital Cost Reductions. Credit Bureau There are three major credit bureaus that keep track of your credit history (Equifax, Experian, TransUnion). They use information that they obtain from your creditors, public records and other sources to generate your credit score, which you may also hear referred to as your FICO score (named after Fair Isaac, the Company that developed the scoring). Credit Report Your credit score and credit history are available in your credit report from the three major credit bureaus. Your dealer and finance company use the information on your credit report as part of their decision on whether to approve your application for credit. Credit Score Your credit score is a number value assigned by each of the three credit bureaus, and gives creditors a high-level picture of your credit history. Each credit bureau uses a different calculation method, and your score may also differ depending on how current and accurate the information is in the credit bureau's file.
Depreciation Depreciation is the loss in value of an asset over time. For a vehicle, it is the difference in its value at a certain point of time compared to the value when the vehicle was new. Destination and Delivery Charges These are the costs of delivering your vehicle from the manufacturer to the dealership. This charge is set by the manufacturer. Down Payment Your Down payment is any amount paid by you when you purchase or lease a vehicle. Any equity that you have in a trade-in may also be applied as a Down Payment. The Down Payment reduces the Amount Financed if you purchase your vehicle. For leases, the Down Payment is part of the Capitalized Cost Reduction.
Early Termination Charge If you end a lease early, you may have to pay a substantial charge. This charge may be up to several thousand dollars. The actual charge will depend on when the lease is terminated. The earlier you end the lease, the greater this charge is likely to be. Equity Equity is the difference between the current value of your vehicle and any amount that you owe on it. Excess Mileage Excess Mileage is the total number of miles that you drive a leased vehicle over (in excess of) the amount of miles specified in your lease. There is a charge for those excess miles, which will be billed at the end of the lease.
Finance Charge The Finance Charge is the dollar amount that your credit will cost you.
Guaranteed Auto Protection (GAP) GAP is a product that, subject to certain conditions, waives the difference between what you owe on your lease or retail account and the amount that your insurance company pays in the unfortunate event that your vehicle is stolen (and not recovered), or is destroyed. Gross Capitalized Cost Gross Capitalized Cost is the value that you and the dealer agree upon for the vehicle that you are leasing. Your Gross Capitalized Cost may include other amounts, products and services that you pay over the term of the lease, such as protection products, outstanding prior credit or lease balance, or taxes and fees. Your Adjusted Capitalized Cost and monthly Rent Charges on your lease are calculated by deducting any Capitalized Cost Reductions from your Gross Capitalized Cost.
Late Charge A Late Charge is a fee imposed when a payment on a lease or retail contract us not paid on time. Lease A lease is a type of agreement between the customer (Lessee) and a dealership or finance source(Lessor) for the use of a vehicle for a specific period of time at a specific payment amount.
Lien A lien is a security interest held by a creditor to protect its interest in a financed vehicle.
Manufacturer's Suggested Retail Price (MSRP) The MSRP is the price that the manufacturer recommends and will be displayed on the vehicle's window sticker. Manufacturer Rebate At times, manufacturers may offer incentives to the customer or dealer for the purchase or lease of a new vehicle. Your dealer will have information on applicable rebates.
Purchase Option With most leases, you have the opportunity to purchase your leased vehicle during the lease or at the end of the lease.
Residual Value The Residual Value is the projected value of the leased vehicle at the end of the lease and is used when calculating the lease payment. Retail Installment Sales Contract The contract between you and the dealer that sets out the terms and conditions of the purchase and financing of your vehicle. The dealer is the seller and creditor on the contract, which is later sold and assigned to a finance source.
Security Deposit You may be required to pay a specified amount of money at the beginning of your lease as security that you will fulfill the terms of the lease. This amount may be refunded to you at the end of the lease, however it may be used to reduce any amount owed for excess wear and use or excess mileage on your leased vehicle. Selling Price The price of the vehicle that you are purchasing, including any extra equipment, accessories, services or products.
Term For a retail installment sales contract, the length of time from the date of your contract until the date that your final payment is due. For a lease, it is one month after the date of the final scheduled payment. Term is generally expressed in months. Trade-In Value The amount that a dealer may offer you for your existing vehicle if you are trading it in on the lease or purchase of another vehicle.
Wear and Use With a lease, you are required to maintain the condition of the vehicle. A certain amount of normal wear and use over the term of the lease is expected. You may be subject to charges for any excess wear and use, such as dents or tire wear and excess mileage. Your dealer can provide you with guidelines on acceptable wear and use or you can click the following link to access Southeast Toyota Finance's Excess Wear and Use Guidelines.
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