Reducing a debt by making payments in installments.

Interest cost of a loan calculated on a yearly basis.

In leasing, the current value of a vehicle at the time of appraisal. Appraised value is important if a vehicle is stolen or at the end of the lease term.

A final lump sum payment made at the end of a finance contract. The lump sum payment must be disclosed at the time of the sale.

Warranty that includes almost every part of the vehicle from the front bumper to the rear bumper. Check your warranty manual for a list of covered items.

A lease where the lessee is NOT obligated to buy the vehicle. NOTE: Some closed-end leases offer lessees a purchase option at the end of the lease term, either for a pre-specified amount (residual) or [..]

Vehicle used by a manufacturer, dealer, or distributor primarily for demonstration purposes.

Reduction in a vehicle’s value due to age and normal wear and tear.

Insurance covering the difference between what is owed on a retail or lease contract and the value of the vehicle upon its loss or destruction.

The total selling price of the vehicle (i.e., negotiated selling price plus optional equipment, extended warranties, etc.). Also referred to as “cap cost”.