| A | B |
|---|
| APR | The annual percentage rate for a loan. Also known as the interest rate. |
| ASE Certified Mechanic | Automotive Service Excellence (ASE) is an impartial |
| Bait and Switch | The practice of advertising a car at an unrealistically low price |
| Base Price | The cost of the car without options |
| Budget | A plan for spending and saving money during a particular period. |
| Certified Used Car | A car that has passed through the dealer's mechanical and physical inspection. |
| Collision & Comprehensive Insurance | Covers the cost to repair YOUR car if YOU are at fault in an accident or if damage occurs to your car as a result of a natural disaster,
vandalism, theft, or fire. |
| Cost of the Loan | Amount of money you will have to pay back in addition to the money you borrowed. |
| Credit Life Insurance | An insurance policy that will pay your loan obligation if you die or are disabled |
| Credit Score | The score that evaluates your credit-worthiness and determines the rate of interest you are eligible to receive. It is also called a FICO or Beacon score |
| Dealer Cost | The true cost of the vehicle to the dealer after subtracting holdbacks and rebates from the invoice price. |
| Dealer List Price | The price posted on the "window sticker." This is set by the factory and is |
| Deductible | A set amount of money that you |
| Depreciation | The steady decline in the resale value of any vehicle that you buy. |
| Down payment | Amount of your own money paid upfront for a vehicle. |
| Extended Warranty | Covers bumper-to-bumper damages after the original factory warranty expires. |
| Factory Warranty | Original warranty on a new car and usually lasts for three years or 36 |
| Factory-to-Dealer Holdbacks | A percentage of the invoice on a 30-60 day sales turn. It is usually 2-3% of the dealer invoice price that is refunded to the dealer after selling the car. |
| Factory-to-Dealer Incentives | A bonus or reimbursement offered on a regional or national level that is refunded to the dealer after selling the car. |
| Gap Insurance | If you car is totaled or stolen |
| Invoice Price | The manufacturer's initial charge to the dealer. This usually is higher than the dealer's cost because dealers receive rebates |
| Lemon | A vehicle that continues to have a defect that substantially impairs its use |
| Liability Insurance | Covers bodily injury or property damage that YOU cause to another person and/or vehicle. |
| Monroney Sticker Price (MSRP) | Shows the base price |
| Premium | The amount of money you pay for your insurance policy. |
| Uninsured Motorist Insurance | Covers YOU if someone injures you or damages your car and they either:
don't have any insurance or not enough insurance. |
| Upside-down | When you owe more on your vehicle than it is worth. |
| Vehicle Identification Number | A 17-digit character number used to identify specific information about each car. |
