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Retail Terms
| Term | Definition |
|---|---|
| ACCESSORIES | Items added to a vehicle by the dealership (e.g., stereos, custom wheels, CD players) |
| AMOUNT FINANCED | the dollar amount of credit provided to you (this is normally the amount being borrowed) |
| ANNUAL PERCENTAGE RATE (APR) | the cost of credit expressed as a yearly rate in a percentage |
| BACKEND PRODUCTS | Products sold by the dealer in addition to the vehicle. For example, Extended Warranties or life/disability insurance, etc. |
| BUYER | A person or an entity that is either the primary on the loan, or the only purchaser of the vehicle |
| CASH DOWN | Currency or check applied toward reducing the balance of the vehicle purchase |
| CASH PRICE | Purchase price of the vehicle |
| CO-BUYER | A second person who purchases a vehicle with the primary buyer but both borrowers reside in separate residences. Both applicants are equally responsible for the repayment of the loan |
| CONTRACT | A legal document stating the obligations of both parties. For HCA, this can be the retail, lease or balloon loan agreement with the customer |
| CREDIT BUREAU | A business that maintains a credit file on all individuals. The file contains the credit history of each individual as reported by their creditors. The information is marketed to businesses who make credit decisions |
| DOC FEE | The Document Preparation fee is the fee the dealership is allowed to charge the customer for completing the required documents to purchase a vehicle. |
| DOWN PAYMENT | used to reduce the purchase price of the vehicle - made up of: Special Offers, Cash, Trade-In |
| FINANCE CHARGE | cost of credit expressed as a dollar amount (this is the total amount of interest and certain fees to be paid over the life of the loan if every payment is made when due) |
| FRAUD | Providing inaccurate information for the purposes of acquiring a loan |
| LATE CHARGE | # of days past due when a late fee is assessed |
| NEGATIVE EQUITY | The trade-in allowance from the dealer is less than the payoff on the Trade-in vehicle |
| NON-RECOURSE | The lender has no right of demand from the dealer in the case of default |
| PAYOFF | The amount still owed to a Lienholder to release title on a trade-in. |
| PROCESSING FEES | Fee charged to the dealer at the time of funding for tier 8 customers. HCA charge $495 processing fee |
| REBATE | Money given by the OEM to the customer for financing a vehicle. This money must be entered on the sales/lease agreement as a “down payment/cap reduction" |
| SELLER / Creditor | Selling Dealership name |
| TIER 8 | refers to a credit classification typically used in lending to describe borrowers with a FICO score below 620. These applicants are considered higher-risk by lenders due to their lower credit scores. |
| TOTAL OF PAYMENTS | the sum of all the payments that will have been made at the end of the loan (this includes repayment of the principal amount of the loan plus all of the finance charges) |
| TOTAL SALE PRICE | the total cost of the purchase, including the down payment |
| TRADE-IN ALLOWANCE | The amount of money the dealer offers the customer for the trade-in. |
| TRADE-IN | A vehicle owned by the customer that is to be part of the purchase of another vehicle |
| VEHICLE IDENTIFICATION NUMBER (VIN) | A unique 17 digit number used to identify motor vehicles |
Created by:
Opstraining
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