Finance and Insurance
Expert-defined terms from the Professional Certificate in Automotive Retail Sales Management course at UK School of Management. Free to read, free to share, paired with a globally recognised certification pathway.
Finance and Insurance Glossary #
Finance and Insurance Glossary
1. Acquisition Cost #
The total cost of purchasing a vehicle, including the price of the vehicle, taxes, fees, and any additional options or accessories.
2. Add #
Ons: Additional products or services offered to customers during the vehicle purchase process, such as extended warranties, service contracts, or protection packages.
3. Annual Percentage Rate (APR) #
The annual rate of interest charged on a loan, expressed as a percentage of the total amount borrowed.
4. Balloon Payment #
A large, lump-sum payment due at the end of a loan term, typically associated with financing options that offer lower monthly payments.
5. Blue Book Value #
The estimated value of a vehicle based on factors such as age, condition, mileage, and market trends, as determined by sources like Kelley Blue Book.
6. Co #
Signer: A person who agrees to be responsible for a loan if the primary borrower is unable to make payments, often used to secure financing for individuals with limited credit or poor credit history.
7. Credit Score #
A numerical representation of an individual's creditworthiness, based on factors such as payment history, credit utilization, and length of credit history.
8. Dealership Financing #
Financing options offered by the dealership, which may include loans from partnering banks or financial institutions, tailored to meet the needs of customers purchasing a vehicle.
9. Depreciation #
The decrease in value of a vehicle over time, influenced by factors such as age, mileage, condition, and market demand.
10. Equity #
The difference between the value of a vehicle and the amount owed on a loan, representing the owner's ownership stake in the vehicle.
11. Extended Warranty #
A service contract that covers the cost of repairs or replacements for specified components of a vehicle beyond the manufacturer's warranty period.
12. Finance Manager #
A dealership employee responsible for arranging financing options for customers, explaining terms and conditions, and ensuring compliance with regulations.
13. Gap Insurance #
Insurance coverage that pays the difference between the amount owed on a loan and the actual cash value of a vehicle in the event of a total loss.
14. Incentives #
Discounts, rebates, or promotional offers provided by manufacturers or dealerships to encourage vehicle purchases.
15. Lease #
A contractual agreement that allows a customer to use a vehicle for a specified period in exchange for monthly payments, with the option to purchase the vehicle at the end of the lease term.
16. Manufacturer's Suggested Retail Price (MSRP) #
The price recommended by the manufacturer for a new vehicle, before any discounts or negotiations.
17. Negative Equity #
The situation in which the amount owed on a loan exceeds the value of the vehicle, often resulting from depreciation or financing with a small down payment.
18. Pre #
Approval: A process in which a lender evaluates a borrower's creditworthiness and determines the maximum loan amount before the vehicle purchase, providing a better understanding of financing options.
19. Residual Value #
The estimated value of a leased vehicle at the end of the lease term, used to calculate monthly lease payments.
20. Title #
A legal document that certifies ownership of a vehicle, issued by the state's Department of Motor Vehicles (DMV) and required for registration and insurance purposes.
21. Upselling #
The practice of offering customers additional products or services during the vehicle purchase process, such as extended warranties or maintenance packages, to increase revenue.
22. Vehicle History Report #
A detailed report that provides information about a vehicle's past, including accidents, maintenance records, title status, and odometer readings, to help buyers make informed decisions.
23. Warranty #
A manufacturer's guarantee that covers the cost of repairs or replacements for specified components of a vehicle within a specified period or mileage limit.
25. Zero Percent Financing #
A financing option that offers no interest charges on a loan, typically used as a promotional incentive to attract customers to purchase vehicles.
26. 72 #
Month Financing: A financing option that extends the loan term to 72 months, reducing monthly payments but increasing the total interest paid over the life of the loan.
27. APR #
See Annual Percentage Rate.
28. Co #
Signer: See Co-Signer.
29. Dealership Financing #
See Dealership Financing.
30. GAP Insurance #
See Gap Insurance.
31. MSRP #
See Manufacturer's Suggested Retail Price.
32. APR #
See Annual Percentage Rate.
33. Extended Warranty #
See Extended Warranty.
34. Lease #
See Lease.
35. Warranty #
See Warranty.
36. APR #
See Annual Percentage Rate.
37. Credit Score #
See Credit Score.
38. Dealership Financing #
See Dealership Financing.
39. Incentives #
See Incentives.
40. Title #
See Title.
41. APR #
See Annual Percentage Rate.
42. Depreciation #
See Depreciation.
43. Extended Warranty #
See Extended Warranty.
44. Lease #
See Lease.
45. Negative Equity #
See Negative Equity.
46. Trade #
In Value: The estimated value of a vehicle that a customer owns and wishes to trade in for a new vehicle, used to reduce the purchase price or down payment.
47. Underwriting #
The process of evaluating a borrower's creditworthiness, income, and financial history to determine the risk of offering a loan and setting the terms and conditions.
48. Variable Rate Financing #
A financing option in which the interest rate may change over time based on market conditions, affecting the total cost of the loan.
49. Wholesale Price #
The price at which dealerships purchase vehicles from manufacturers or auctions, often lower than the retail price offered to customers.
50. Zero Down Payment #
A financing option that requires no initial payment from the buyer, with the total cost of the vehicle financed over the loan term.
51. APR #
See Annual Percentage Rate.
52. Credit Score #
See Credit Score.
53. Financing Terms #
The conditions and requirements of a loan, including the interest rate, loan amount, term length, and monthly payments.
54. Loan Term #
The length of time over which a loan is repaid, typically ranging from 36 to 72 months for vehicle financing.
55. Monthly Payment #
The amount due each month to repay a loan, including principal and interest, as well as any additional fees or charges.
56. Principal #
The original amount borrowed in a loan, excluding interest and fees, which is repaid over the loan term.
57. Trade #
In Value: See Trade-In Value.
58. Wholesale Price #
See Wholesale Price.
59. Zero Down Payment #
See Zero Down Payment.
60. APR #
See Annual Percentage Rate.
61. Credit Score #
See Credit Score.
62. Depreciation #
See Depreciation.
63. Equity #
See Equity.
64. Loan Term #
See Loan Term.
65. Monthly Payment #
See Monthly Payment.
66. Principal #
See Principal.
67. Trade #
In Value: See Trade-In Value.
68. Wholesale Price #
See Wholesale Price.
69. Zero Down Payment #
See Zero Down Payment.
70. APR #
See Annual Percentage Rate.
71. Co #
Signer: See Co-Signer.
72. Credit Score #
See Credit Score.
73. Dealership Financing #
See Dealership Financing.
74. Extended Warranty #
See Extended Warranty.
75. Financing Terms #
See Financing Terms.
76. Incentives #
See Incentives.
77. Loan Term #
See Loan Term.
78. Manufacturer's Suggested Retail Price (MSRP) #
See Manufacturer's Suggested Retail Price.
79. Negative Equity #
See Negative Equity.
80. Wholesale Price #
See Wholesale Price.
81. Zero Down Payment #
See Zero Down Payment.
82. APR #
See Annual Percentage Rate.
83. Balloon Payment #
See Balloon Payment.
84. Credit Score #
See Credit Score.
85. Down Payment #
A initial payment made by the buyer at the time of purchase, reducing the loan amount and total cost of the vehicle.
86. Equity #
See Equity.
87. Financing Terms #
See Financing Terms.
88. Incentives #
See Incentives.
89. Loan Term #
See Loan Term.
90. Manufacturer's Suggested Retail Price (MSRP) #
See Manufacturer's Suggested Retail Price.
91. Negative Equity #
See Negative Equity.
92. Principal #
See Principal.
93. Residual Value #
See Residual Value.
94. Title #
See Title.
95. APR #
See Annual Percentage Rate.
96. Credit Score #
See Credit Score.
97. Depreciation #
See Depreciation.
98. Financing Terms #
See Financing Terms.
99. Incentives #
See Incentives.
100. Lease #
See Lease.
101. Manufacturer's Suggested Retail Price (MSRP) #
See Manufacturer's Suggested Retail Price.
102. Negative Equity #
See Negative Equity.
103. Principal #
See Principal.
104. Residual Value #
See Residual Value.
105. Title #
See Title.
106. APR #
See Annual Percentage Rate.
107. Blue Book Value #
See Blue Book Value.
108. Credit Score #
See Credit Score.
109. Depreciation #
See Depreciation.
110. Equity #
See Equity.
111. Finance Manager #
See Finance Manager.
112. Incentives #
See Incentives.
113. Loan Term #
See Loan Term.
114. Manufacturer's Suggested Retail Price (MSRP) #
See Manufacturer's Suggested Retail Price.
115. Negative Equity #
See Negative Equity.
116. Principal #
See Principal.
117. Residual Value #
See Residual Value.
118. Title #
See Title.
119. Upselling #
See Upselling.
120. Vehicle History Report #
See Vehicle History Report.
121. APR #
See Annual Percentage Rate.
122. Credit Score #
See Credit Score.
123. Dealership Financing #
See Dealership Financing.
124. Gap Insurance #
See Gap Insurance.
125. Incentives #
See Incentives.
126. Lease #
See Lease.
127. Manufacturer's Suggested Retail Price (MSRP) #
See Manufacturer's Suggested Retail Price.
128. Negative Equity #
See Negative Equity.
129. Residual Value #
See Residual Value.
130. Title #
See Title.
131. Warranty #
See Warranty.
133. Zero Percent Financing #
See Zero Percent Financing.
134. APR #
See Annual Percentage Rate.
135. Credit Score #
See Credit Score.
136. Dealership Financing #
See Dealership Financing.
137. Extended Warranty #
See Extended Warranty.
138. Finance Manager #
See Finance Manager.
139. Gap Insurance #
See Gap Insurance.
140. Incentives #
See Incentives.
141. Loan Term #
See Loan Term.
142. Manufacturer's Suggested Retail Price (MSRP) #
See Manufacturer's Suggested Retail Price.
143. Negative Equity #
See Negative Equity.
144. Pre #
Approval: See Pre-Approval.
145. Residual Value #
See Residual Value.
146. Title #
See Title.
147. Upselling #
See Upselling.
148. Vehicle History Report #
See Vehicle History Report.
149. Warranty #
See Warranty.
151. Zero Percent Financing #
See Zero Percent Financing.
152. APR #
See Annual Percentage Rate.
153. Co #
Signer: See Co-Signer.
154. Credit Score #
See Credit Score.
155. Dealership Financing #
See Dealership Financing.
156. Extended Warranty #
See Extended Warranty.
157. Gap Insurance #
See Gap Insurance.
158. Incentives #
See Incentives.
159. Lease #
See Lease.
160. Manufacturer's Suggested Retail Price (MSRP) #
See Manufacturer's Suggested Retail Price.
161. Negative Equity #
See Negative Equity.
162. Pre #
Approval: See Pre-Approval.
163. Residual Value #
See Residual Value.
164. Title #
See Title.
165. Upselling #
See Upselling.
166. Vehicle History Report #
See Vehicle History Report.
167. Warranty #
See Warranty.
169. Zero Percent Financing #
See Zero Percent Financing.
170. APR #
See Annual Percentage Rate.
171. Credit Score #
See Credit Score.
172. Dealership Financing #
See Dealership Financing.
173. Extended Warranty #
See Extended Warranty.
174. Gap Insurance #
See Gap Insurance.
175. Incentives #
See Incentives.
176. Lease #
See Lease.
177. Manufacturer's Suggested Retail Price (MSRP) #
See Manufacturer's Suggested Retail Price.
178. Negative Equity #
See Negative Equity.
179. Pre #
Approval: See Pre-Approval.
180. Residual Value #
See Residual Value.
181. Title #
See Title.
182. Upselling #
See Upselling.
183. Vehicle History Report #
See Vehicle History Report.
184. Warranty #
See Warranty.
186. Zero Percent Financing #
See Zero Percent Financing.
187. APR #
See Annual Percentage Rate.
188. Blue Book Value #
See Blue Book Value.
189. Credit Score #
See Credit Score.
190. Depreciation #
See Depreciation.
191. Equity #
See Equity.
192. Finance Manager #
See Finance Manager.
193. Incentives #
See Incentives.
194. Loan Term #
See Loan Term.
195. Monthly Payment #
See Monthly Payment.
196. Principal #
See Principal.
197. Trade #
In Value: See Trade-In Value.
198. Wholesale Price #
See Wholesale Price.
199. Zero Down Payment #
See Zero Down Payment.
200. APR #
See Annual Percentage Rate.
201. Credit Score #
See Credit Score.
202. Financing Terms #
See Financing Terms.
203. Loan Term #
See Loan Term.
204. Monthly Payment #
See Monthly Payment.
205. Principal #
See Principal.
206. Trade #
In Value: See Trade-In Value.
207. Wholesale Price #
See Wholesale Price.
208. Zero Down Payment #
See Zero Down Payment.
209. APR #
See Annual Percentage Rate.
210. Credit Score #
See Credit Score.
211. Depreciation #
See Depreciation.
212. Equity #
See Equity.
213. Loan Term #
See Loan Term.
214. Monthly Payment #
See Monthly Payment.
215. Principal #
See Principal.
216. Trade #
In Value: See Trade-In Value.
217. Wholesale Price #
See Wholesale Price.
218. Zero Down Payment #
See Zero Down Payment.
219. APR #
See Annual Percentage Rate.
220. Credit Score #
See Credit Score.
221. Dealership Financing #
See Dealership Financing.
222. Extended Warranty #
See Extended Warranty.
223. Financing Terms #
See Financing Terms.
224. Loan Term #
See Loan Term.
225. Monthly Payment #
See Monthly Payment.
226. Principal #
See Principal.
227. Trade #
In Value: See Trade-In Value.
228. Wholesale Price #
See Wholesale Price.
229. Zero Down Payment #
See Zero Down Payment.
230. APR #