Open-End Lease
A lease where no specific time limit is set for the vehicle to remain in service. In most cases, at the end of the lease, any gain or loss from the sale of the vehicle belongs to the lessee.

Private Transaction
When one consumer sells a vehicle to another consumer without the interaction of a car dealer.

Refinance
To provide new financing for, as by discharging a mortgage with the proceeds from a new mortgage obtained at a lower interest rate.

Repossession
To reclaim possession of property for failure to pay installments due.

Residual Value
The amount agreed upon to represent the value of the car at the termination of a lease, usually determined by the amount of depreciation in the car's value predicted during the term of the lease.

Retail Price
The price paid by a consumer to a dealer or individual for a vehicle. The dealer or individual sets the retail price of a used car by calculating the wholesale price paid plus reconditioning expenses and other costs.

Savings Rate
Your savings rate is used to decide between two options that cost you money at different times. (See Cost Analysis) It is wise when applying to input a reasonable pre-tax average.

Term
The length of time that a lessee will make payments on a loan. Typical car loans have terms of 24, 36 or 48 months.

Title
A legal document issued by the state showing the owner’s name and the vehicle’s mileage at the time of sale.

Trade-in
A vehicle that is sold to either a new or used car dealer as part of the purchase of another.

Trade-in Value
The amount a dealership credits the buyer for the vehicle provided as partial or full payment for another vehicle. Amount credited is frequently about 5% below the wholesale value of the vehicle.

Underwriting
The process of verifying data and approving a loan.

Upfront Costs
Fees and charges collected at the time of the loan, as opposed to over the life of the loan. May reduce the interest rate paid over the life of the loan.

Upside-down
When the value of a vehicle is lower than the outstanding balance of the loan secured by the vehicle.

Used Car Guidebooks
Publications that report current wholesale and/or retail prices of vehicles. Prices are listed according to year, make, model, options, mileage, and condition of the vehicle. Prices are generally determined from factors such as auto auction prices, retail sales prices, other wholesale transactions, and regional demand. Major examples are: Automotive Market Report (AMR), Black Book, Kelley Blue Book, and National Automobile Dealers Association (NADA) official Used Car Guide.

Vendor
One that sells or vends.

Waive
To give up a claim or right voluntarily; relinquish.

Wholesaler
A dealer who buys vehicles at auction – or from a dealer or another wholesaler – and resells them in the wholesale market, i.e., to dealers rather than consumers. Wholesalers also buy and sell cars among the dealers with whom they do business.

Yield
The annual rate of return on an investment, expressed as a percentage.