Investment Rate of Return

This is the rate that is given to you if you invest the down payment that you were going to pay to the Lease Company. It depends on the type of investment.

Invoice Price of the manufacturer

Invoice price is the amount that is charged by the manufacturer form the dealer. It is high but with rebates and other packages the price offered to the consumer by the dealer is lower.

Lease Term

It is the time period in years for which the car will be leased.

Lessee

It is the person who takes the car on lease.

Lessor

It is the lease company.

Lien

It is a claim made on the car by the lendersfor defaults.

Lost interest on buy option

This is the interest rates that you earn if you invest the down payment money for buying a car.

Lost interest on lease option

This is the interest rate earned by you if you invest your lease down payment and other fees.

Loan to Value (LTV)

It is the amount that is lent for car financing relative to the published book worth of the car.

Monthly Payment Amount

It is a certain amount of the loan to be paid back each month for certain yeas until the loan is completely returned.

Negotiated Price of the Vehicle

The price that both the consumer and the dealer agree upon.

No sales tax deduction for trade-in

Some states will calculate the sales tax on the purchase price while some calculate on the purchase and the trade in amount. The states that don't deduct the value charge larger sales tax.

Negative Trade Equity

It is the difference between the trade-in car's value and the liens paid by the dealer.

Principal

It is the total amount of loan taken which may increase if the interest rate is capitalized.

Residual Value

It is the cars market value at the time of the lease term end.

Rate of depreciation

It is the rate with which a vehicle looses its value per year. A high rate will be 20% each year and a low depreciation rate is about 10% of the total cars market value.

Term Loan

It is a loan that has to be paid in lump sum after the lease term is over.

Total purchase price (before tax)

The cost of the car with additional features feesor chargesthat you are buying excluding the sales tax.

Trade allowance

It is the money given to you for the trade in car. In some states if you trade in a vehicle to purchase a new car you may even get a reduced sales tax.

Trade Equity

This is the difference between the price of the car that you want to trade in and the liens paid by the dealer.

Variable Rate Financing

In this financing the interest rate varies. It can rise up or fall below an average rate.