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Asset
Anything of monetary value owned by an individual or business. Potential collateral for a loan.
Buy-back value
Also known as residual value. This is the future resale value of a vehicle.
Debt
Also known as liability. This is an amount owed to creditors.
Demonstrator
A vehicle used by a car dealer to demonstrate the make and model to customers and used for test drives.
Depreciation
A decrease in the value of a car through wear, deterioration or age.
Fixed Interest Rate
An interest rate that, once established, does not vary according to fluctuations in the prime lending rate.
Liability
Also known as debt. This is an amount owed to creditors.
Lien
An assignment made by a creditor against a piece of property used as security for a debt.
Loan
Money owned by one party and used by another. It is repaid under specific terms and rates of interest.
Net Worth
The value of your total assets less your total liabilities. The bottom line.
Prime Lending Rate
The loan interest rate a financial institution uses as a base to calculate interest rates.
Principal Loan Amount
The amount of money borrowed before interest charges are applied.
Residual Value
A future resale value assigned to an automobile.
Sticker Price
The retail price for an automobile suggested by the manufacturer.
Trade-in
A vehicle whose value is calculated by a dealer and applied against the purchase price of another vehicle.
Variable Interest Rate
An interest rate on a loan that fluctuates according to changes in the prime lending rate.
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