An acquisition fee, sometimes referred to as an assignment fee, bank fee, or administrative fee, is a payment you may have to make when you lease a vehicle. In most cases, this fee is paid to the lender and is designed to cover the costs associated with creating a loan (one notable cost being the credit check the lender will run). These fees will vary in amount, with some costing as little as $200, while others may run as high as $1,000.
The actual cash value of a vehicle refers to its current worth and is determined by subtracting the depreciation a vehicle has experienced from its replacement cost. Depreciation will be calculated using a number of factors and vary based on wear-and-tear, car brand, and total mileage. Insurance companies will use the actual cash value of a car to determine whether it is a total loss in the event of an accident. If the damage costs exceed the ACV, the car will likely be declared as “totaled.”
Aftermarket accessories, or aftermarket parts, are replacement components for a vehicle that its original manufacturer does not create. These parts are often used to lower the cost of repairs after a car has been damaged. While these parts can sometimes be cheaper, they may also affect the insurance coverage of a vehicle. Some insurers won’t cover aftermarket accessories, and if they do, the limits may be significantly lower. Insurers may also offer additional coverage specifically designed to cover aftermarket accessories.
An air pollution score, more commonly referred to as a smog rating, assesses a vehicle’s tailpipe emissions and their likelihood of contributing to air pollution. The scores range from 1 to 10, with 10 being the highest possible rating. Ratings are also separated into different tiers based on federal and certain state standards. For the federal level, which is based on EPA criteria, vehicles are separated between Tier 2, and the more strict, Tier 3. For some states, most notably California, there will be separate standards (In California’s case, the California Air Resources Board uses its own CARB tiers).
Anti-theft systems are safety features many vehicles have to ensure they are not stolen. The methods by which these systems prevent theft may be manual or automatic and include immobilizing technology, kill switches, car alarms, and GPS tracking. Anti-theft systems are encouraged by insurance companies and can reduce a driver’s monthly premiums significantly.
The asking price for a vehicle refers to the amount of money the owner is selling their vehicle for. It may also refer to the manufacturer’s suggested retail price, or MSRP, which is the amount a manufacturer recommends a vehicle be sold for. An asking price can often be negotiated, with many sellers accepting lower offers in order to offload a vehicle.
Auxiliary features on a vehicle are optional parts installed by a manufacturer that assist or supplement primary systems. These features include power windows, windshield wipers, seat adjusters, door locks, and sunroofs. Auxiliary features also include those that assist major systems, like power steering, alternators, starters, fuel pumps, and power assistance for brakes.
An active pedestrian protection system is a safety feature many manufacturers have implemented in their vehicles, notably Polestar, Ford, and BMW. Using cameras and sensors, these systems will alert the driver when a pedestrian is in the front of the car. The exact specifications of the system may vary depending on the brand; when the PPS system in Polestar is activated, for example, an alarm is sent via Polestar connect, and the hood of the vehicle will raise and push back.
If a car lacks certain items of documentation and the vehicle’s complete history is not known to motor vehicle agencies, it may receive an affidavit title. This allows anyone with a legal interest in the vehicle to transfer ownership if the process becomes necessary. Affidavit titles are often needed when a vehicle owner dies but lacks a will or any documentation on the vehicle.
Any vehicle operating primarily on private roads for agricultural purposes should receive an agricultural vehicle title. These vehicles are mainly used to transport farm commodities like feed, fertilizer, seed, livestock, poultry, bees, poultry, and other farm animals.
Airbag deactivation is an optional feature automotive professionals may install on a car, given the driver receives approval from the National Highway Traffic Safety Administration (or NHTSA). Needing this approval usually relates to medical reasons or childcare requirements. Once authorized, drivers can go to an automotive professional to have an on/off switch installed to disable their airbag when necessary.
The guidelines for what vehicles qualify as “antiques” varies. They depend on what jurisdiction the car is registered in and what organizational definition is used. For the most part, these cars must have been manufactured at least 25 years ago (and in some cases 45-50 years) and not used for commercial purposes. Sometimes there is a monetary requirement as well, with some areas requiring the vehicle to be valued at over $10,000.
Annual percentage rate, or APR, is the cost you’ll pay to maintain a vehicle loan, including any associated fees and the percentage you’ll be charged on the principal. How much you pay for APR will be determined by various factors, including the size of your loan, your credit history, how large your down payment was, what type of vehicle you have, and how long your loan terms last.
An assembled vehicle is a vehicle that has been repaired or reconstructed by an entity separate from the original manufacturer. For a car to get this classification, major components must be replaced, and the car may be repaired with new parts. An assembled vehicle will often get a new title; this will be either a rebuilt, reconstructed, or assembled vehicle title.
All-wheel drive, or AWD, is a type of drive system that provides power to all four wheels simultaneously. AWD systems can also shift the power between the front and back wheels depending on the traction needs of the vehicle. AWD is provided to a car with three separate differentials, also known as gearboxes, which are located in the rear, center, and front of the vehicle.
Backup assistance is a feature many newer models of vehicles have that helps the driver complete difficult maneuvers, primarily those that involve getting out of parking spots or driveways. Backup assistance systems use a series of cameras or radars to detect objects. Depending on the system, these backup assistance protocols may be automatic or manual. In the case of a manual system, the driver is responsible for watching the camera and adjusting if they see an object. For automatic, the system will react on its own, braking if it predicts a collision.
Base price refers to the cost of a vehicle without any optional equipment, registration fees, titles, insurance, or taxes. Optional equipment varies based on what manufacturer you choose but may generally include any equipment that doesn’t come with the standard trim; this includes protective coatings, certain safety features, heated seats, sun or moon roofs, and heads-up displays.
Branded titles, or title brands, are a type of title given to a used vehicle that has been in an accident, collision, or otherwise suffered significant damage. The most common branded titles include Reconstructed, Salvage, Junk, Lemon, Flood, and Totaled. Governmental agencies at the state level will give these titles to cars that may be considered unsafe to drive, making these vehicles difficult to insure.
A buyout amount refers to the amount you would need to pay to purchase a car you are leasing. This number is usually available on your lease paperwork or monthly leasing statement. A buyout amount is determined by combining the residual value of your vehicle with your remaining payments and any additional fees.
Balloon payments refer to an option offered by certain manufacturers and lenders regarding the final payment on a loan. Balloon payments are a larger lump sum that can reduce your monthly costs by increasing the size of the last loan payment. These payments can be hundreds, thousands, or even tens of thousands of dollars more than your regular monthly payments; because this is riskier, lenders may charge you higher interest rates or fees to compensate.
As an outdated vehicle brand, this describes a car that an insurance company has issued a bond. This is usually due to the current driver’s inability to prove their legal vehicle ownership. This title brand is no longer valid and was removed from usage on January 17th, 2003.
For vehicles, the term “bonded” refers to a bonded title, which helps ensure and prove that a specific person is the vehicle’s legal owner. Also known as a Lost Title Bond or Certificate of Title Surety Bond, the car’s owner can use a bonded title if the original title goes missing. The primary way drivers use these documents is to establish their ownership in the eyes of legal entities like the Department of Motor Vehicles (or DMV).
A bump rate, also referred to as a spread, is the difference between the buy rate (what a dealer pays to finance a loan or lease) and the sell rate (the rate that the dealer sells the financing to you). Bump rates tend to hover around 1%, but dealers will often neglect to disclose the actual amount.
A capitalized cost reduction, or cap reduction, is a fee you can pay at the start of a lease to lower the overall cost. Similar to a down payment on a car you intend to own, cap reductions lower both the total amount you owe and your monthly payments.
A car title is a government-issued document that proves individual ownership. It contains various pieces of information that help identify both the vehicle and owner, including the owner’s name and address, the date the title was issued, mileage on the issue date, the vehicle identification number (VIN), as well as the car’s make, model, and year. A title will also contain signatures from the current owner, former owner, and a state official.
Cash rebates, or car rebates, are manufacturer incentives given to drivers after they buy or lease a new vehicle. To encourage a purchase or loan, these manufacturers will lower the total cost by returning a percentage or sum of the initial vehicle payment. Unlike a discount, you receive this money at a later date.
For a car to qualify as a classic, it must have been manufactured at least 20 years ago, though this number may increase depending on the state in which the vehicle is registered. These vehicles will carry different insurance premiums and will usually have a higher resale value than a traditional car.
A closed-end lease refers to an agreement where the person making payments (or lessee) does not have to purchase the vehicle at the end of their terms. The terms on a closed-end lease are often more strict, but the agreement tends to be lower risk. Closed-end leases are often safer because the driver does not have to deal with the risk of their car declining in value (also known as depreciation).
If a vehicle is in an accident or collision that results in significant damage, it may receive a collision title. Insurance companies use these brands while they wait to determine whether a car can be reasonably rebuilt or needs to be declared salvage.
A commercial vehicle is any vehicle used for the purposes of business. This can include those used to transport goods, paying passengers, fleet vehicles, or company cars. Some of these vehicles require a commercial driver’s license, or CDL, to operate. The Federal Motor Carrier Safety Administration has a stricter definition of commercial vehicles, stating that only vehicles engaging on a highway in interstate commerce to transport passengers or property qualify.
While the definition of “corrected title” varies based on state, it generally refers to a title reissued due to incorrect, missing, or changed information. The reasons why someone may need a corrected title include: the owner has changed, the owner’s name isn’t correct, the mileage is incorrect, or there has been a change in the lienholder.
A credit score is a rating of your credit-related behavior and a way for companies to assess how likely you are to repay a loan on time. The score is determined by your current credit utilization, the number of loans you currently have, how much debt you have left to pay, and various other factors. Lenders may use a specific type of credit score for vehicle loans called a FICO auto score. Your FICO auto score is explicitly based on your behavior relating to past auto loans. A low FICO score may increase your monthly premiums or interest rates; in some cases, it may prevent you from getting an auto loan at all.
Similar to a junk title, a crushed title brand is reserved for cars that have been in a major accident or another significant wreck. These vehicles are heavily damaged and likely will only have value if sold for parts. In the case of a crushed brand, the frame or chassis of a car has been destroyed. This damage is usually too extensive to repair, so repairing the vehicle to the point that it is driveable is not an available option.
A customer cash incentive, also known as bonus cash, is a manufacturer rebate given to buyers to encourage them to purchase a specific vehicle. These incentives can be applied to the sales price of a car or the finance price of a lease. In some cases, a driver or vehicle must meet certain criteria to get a customer cash incentive. This criterion includes showing proof of purchase or previous ownership of another vehicle type (for example, one sold by a competitor).
The capitalized cost, sometimes referred to as the lease price, for a leased vehicle refers to its value (plus any additional costs or fees) at the beginning of the lease terms. This cost may change after negotiations, as the final capitalized cost will be a price that you and a dealer agree upon. Because you can negotiate the cap cost, it tends to be lower than the vehicle’s MSRP.
Cargo room, or cargo capacity, refers to the amount of space that a vehicle has in its cargo areas. The precise space this refers to changes based on the type of vehicle: for a standard car, this would be the trunk; for a hatchback, it may be behind the rear seat; and for an SUV or minivan, it may be the total space available when rear seats are removed.
A certified pre-owned vehicle is a car that has been inspected and repaired by the manufacturer for resale purposes. This often makes them a higher quality purchase than regular used cars; they will also usually come with a dealer or manufacturer warranty, as well as other bonuses like roadside assistance, better financing options, and travel expense reimbursements.
A clear title, commonly referred to as a clean title, indicates that a car has never been declared a total loss. A vehicle with a clear title will also be free of outstanding financial issues and will usually fetch the highest resale price. While it may have problems with its internal mechanics, any required repairs won’t exceed the car’s current total worth.
Collision insurance is a type of coverage designed to cover any damage your vehicle receives from an object or during certain rollover accidents. This damage can come from several sources: another vehicle, a falling tree or fence, or in the case of an accident, when your car falls or flips. Collision insurance is optional in many areas and will usually only cover the cost of repairing or replacing your vehicle.
Combined fuel economy refers to the average city and highway MPG a vehicle can achieve. Often called combined MPG, this number is seen as the most accurate assessment of a vehicle’s fuel economy. In many cases, combined fuel economy is calculated by weighting the highway MPG by 45% and the city MPG by 55%.
Comprehensive insurance is a type of coverage that protects your vehicle against non-collision damage. Incidents that qualify for a comprehensive claim include extreme weather events, vandalism, theft, fire, accidents involving animals, and damage to your windshield or other glass components. Comprehensive policies are usually optional, with no states requiring that you carry this coverage type. However, certain lease or loan agreements may require you to retain comprehensive coverage.
Overall rating scores of how safe a vehicle is when it crashes into different items are known as crash test ratings. These scores are designed to predict how well a vehicle will protect occupants during a crash. Two organizations primarily handle these ratings: the National Highway Traffic Safety Administration (NHTSA) and the Insurance Institute for Highway Safety (IIHS). The NHTSA gives vehicles a rating out of five stars, evaluating their frontal crash, side barrier crash, and side pole crash capabilities, in addition to their rollover resistance. The IIHS rates vehicles by placing them into four categories: good, acceptable, marginal, or poor. Their evaluation involves testing frontal overlap crash capabilities, roof strength, head restraints, and seat protection.
A crumple zone, or crush zone, is a section of a vehicle designed to absorb the force of an impact. These areas can vary in size and location depending on various factors, including the vehicle’s type, purpose, size, and weight. Crumple zones are an effective safety tool that prevents energy from being transferred to a vehicle’s occupants and redistributes it to other areas where it will do less damage.
Curbstoning is a car-selling scam where a private seller or dealer will offload sub-par vehicles onto unsuspecting buyers. Curbstoning scams are named for the location they often take place: the side of the road or “curb.” Curbstoners may be involved with a dealership, using this technique to sell a car outside their business that doesn’t meet business standards. In most cases, these vehicles are poorly repaired salvage cars designed to look cosmetically functional so sellers can make the maximum profit.
A damage disclosure statement is a document that outlines any damages a vehicle has suffered. These damages are expressed in terms of their cost. The document generally includes the nature of the damages, a description of the car, the date a professional last inspected the vehicle, and the name of the vehicle’s owner. Drivers living in North Dakota, South Dakota, and Iowa must file damage disclosures before selling their cars, providing a copy of the document to prospective buyers.
A dealer holdback is a payment made by manufacturers directly to dealers, compensating them for selling a new vehicle. How much a manufacturer pays will vary but will usually be a percentage of either the manufacturer’s suggested retail price (MSRP) or invoice price. The amount a dealer gets through a holdback can also depend on the make and model of the new vehicle, with some automakers (specifically luxury brands) not offering a dealer holdback at all.
A dealer invoice is a document outlining the amount a dealership will pay when it receives a vehicle. The value on these invoices that a dealer must pay is known as an invoice price. This price will vary based on the type of vehicle and whether a dealer holdback or any incentives affect the price.
Car depreciation is the rate at which a vehicle’s value declines over a set period of time. On average, a car will lose half its value in the first five years after purchasing it. How quickly a specific vehicle depreciates will depend on its age, level of wear-and-tear, make and model, how many previous owners it has had, and smaller details like its color.
A dismantled title is given to vehicles that have been severely damaged, often to the point where the cost of repairs would exceed the vehicle’s overall value. In this case, the only viable financial option would be to strip the car for parts or “dismantle” it. Much like with salvage titles, a vehicle with a dismantled title is nearly impossible to insure or drive legally.
A documentation charge, often referred to as a documentation fee or simply “doc fee,” is a payment charged by dealerships in order to process a vehicle’s paperwork. These fees are meant to cover the labor costs of dealership employees, including staff dealing with the transaction’s financial aspects, titling, registration, and those interacting with the DMV. Doc fees can be negotiated, with some buyers able to avoid paying them altogether.
The Department of Motor Vehicles, or DMV, is an organization responsible for a variety of vehicle-related licensing and oversight. Their responsibilities include testing and issuing driver’s licenses, administering vehicle registrations, providing driving records, and transferring titles. The DMV has different names depending on your state: for example, the DMV in Maryland is called the Motor Vehicle Administration (or MVA).
Damage severity is a metric used on documents like a police report to indicate how much a vehicle has been harmed during any given incident. Also referred to as a vehicle damage rating, damage severity is separated into four main categories: N, which indicates minor damage; S, which indicates major but repairable damage; B, which indicates the vehicle is only good for parts; and A, which indicates the car is completely ruined and has no usable parts.
Dealer incentives are a strategy employed by manufacturers to encourage dealerships to sell specific vehicles. These incentives include rebates, discounts, and cash payments, usually targeting models that have seen slowing or poor sales. Dealer incentives increase the profit margins for dealerships while helping manufacturers boost sales for their less popular vehicles.
Dealer preparation fees are specific costs charged by dealerships to prepare your vehicle after purchase. This fee covers cleaning and other prep procedures your car will undergo before a dealer transfers ownership. While dealer prep fees usually range between $50 and $600, they are often negotiable.
A declarations page is an insurance document listing information related to your specific policy. These documents will include what vehicles your insurance covers, the different types of coverage you utilize, your policy number, when your coverage went into effect, when your coverage expires, your personal details, your agent’s personal details, what you pay, and what your deductible is.
A disposition fee, sometimes referred to as a disposition charge, is a fee you pay when you return a leased vehicle to the dealership. Dealers charge these fees to cover costs associated with preparing the vehicle for the next driver. These costs usually range between $200 and $500, covering cleaning and repurposing. The exact amount you’ll pay for a disposition fee will depend on the length of your lease terms, the make and model of your vehicle, what state you live in, and what dealership you lease through.
A down payment on a vehicle is a percentage or portion of a car’s overall cost that can be paid upfront. The average down payment ranges from 10% to 20%; The larger the down payment, the lower your total cost or the size of your monthly payments. Some dealerships will offer special promotions where you do not have to pay a down payment, though this usually doesn’t lower the overall cost of the vehicle.
A duplicate title is a document designed to replace an original title in the event it is destroyed, damaged, lost, or stolen. It contains all the same information as the original title and can be used to prove or transfer ownership of a vehicle. While the requirements to acquire a duplicate title vary by state, you will need to fill out a replacement title form in most cases. You’ll then need to bring it and a valid form of identification (like your license) to the DMV, along with the processing fee.
An early termination refers to lease contracts, specifically ending them before the date agreed upon in your terms. Terminating your lease early usually comes with penalties, like an early termination fee, payment of any amount remaining on your lease, the value your car could have after a sale, and more.
Vehicle emissions are a byproduct of fuel combustion and include substances like non-methane organic gasses, carbon monoxide, nitrogen oxide, formaldehyde, and particulate matter. These emissions are harmful to individuals and the environment, creating pollution that can stay in the air and atmosphere. High enough pollution levels can create smog, which has been known to cause difficulty breathing and lung disease.
An equity lease, or open-end lease, is a type of lease agreement that accounts for vehicle depreciation. Each month, the cost of the vehicle will depreciate a pre-set amount until you reach a balance set by the lessor or dealership. These leases can be risky; in a closed-end lease, the financial risk lies mainly with the lessor, while open-end leases lay the risk primarily on the lessee.
Excess wear-and-tear refers to the terms of a lease in which certain condition standards have been established. If the wear on your vehicle exceeds what your lease agreement allows, you may be subject to fines. This wear can include damage to the exterior, broken parts, cracked glass, excessively worn tires, and sub-par repairs.
If a car is registered in the United States but intended for sale outside the country, it will need an export title. This documentation is used by the U.S. Customs and Border Protection to ensure that the car is no longer legal to drive within the United States.
An extended warranty is a guarantee to cover some, or all, of the cost of certain repairs beyond the standard warranty coverage. The manufacturer, dealership, or a third-party company provides these warranties. Extended warranties will cover the vehicle for a set period of time or number of miles depending on the plan you purchase.
An electric vehicle, or EV, is any vehicle that uses electricity to fuel its propulsion system. There are four main types of electric vehicles: all-electric, which have a large battery and fossil fuels whatsoever; a plug-in hybrid, or PHEV, which uses both gas and electricity and can be charged externally; a hybrid electric, or HEV, which uses both electricity and gas but cannot be charged from an external source; and fuel cell electric vehicles, or FCEVs, that convert hydrogen into electricity to power their motor.
A vehicle’s emissions score, or smog rating, is an assessment of its ability to contribute to air pollution. Focusing on vehicle tailpipe emissions, these scores are out of ten (with ten being the cleanest and one being the least clean).
If a vehicle has an odometer that has reached the highest mileage it’s capable of displaying, it has “exceeded its mechanical limits.” Older odometers often displayed only five or six numbers, meaning once you reached 99,999 miles or 999,999 miles, the device would stop counting the mileage. In some cases, these devices would also “roll over,” starting the mileage back at 1.
An exempt vehicle can refer to a few different situations, primarily a vehicle that is exempt from certain tolls or taxes. These vehicles may belong to car-pool programs or public agencies that aren’t operated for profit, like ambulances or vehicles that transport foreign dignitaries. Depending on the state, it can also refer to vehicles used to train people to drive, farm vehicles, interstate commerce cars, and vehicles driven by those with disabilities.
Vehicles with this brand have been specially identified by the U.S. Customers and Border Protection and are determined for exploration outside of the United States. A car with this brand cannot be driven, resold, or registered in the United States or any of its territories.
Failing an emissions test means that your vehicle did not meet the state or federal criteria required for you to renew your registration. Without a renewed registration, you won’t be able to drive your vehicle legally (though there is a grace period where you can still use your car). The most common reasons that a vehicle fails an emissions test include issues with a vehicle’s exhaust system, problems with its engine, faulty sensors, or issues with its fuel storage.
Financing a car is a way to acquire a vehicle without paying the entire sales price upfront. It usually involves getting a loan or lease, which requires you to make regular monthly payments in addition to some additional fees. Once the lease or loan is paid, you may own the vehicle or need to return it at the end of your terms.
Financing and insurance, or F&I, refers to the business office of a dealership. This department is responsible for auto service contracts, extended warranties, credit insurance, GAP insurance, and various other facets relating to purchasing a vehicle.
The fixed residual, or residual value, refers to what a vehicle is worth at the end of a lease. This value is usually set at the start of your lease terms; if you decide to purchase the car at the end of your lease, you’ll pay this price plus any additional fees the dealership requires.
A flood-damaged title, commonly referred to as a flood title, is given to vehicles that have sustained water damage due to flooding. To get this title, vehicles usually need to be submerged to the point where water has filled the engine compartment, trunk, or cabin. Vehicles with flood titles may appear functional from the outside but often contain significant damage; therefore, it’s wise to avoid purchasing them.
A vehicle’s fuel economy refers to its miles per gallon or the distance it can cover on a single tank of fuel. The more miles a car can travel per gallon, the better its fuel economy is. For electric vehicles, fuel economy is measured in MPGe, which measures the equivalent charge used by its battery. Fuel economy is usually calculated as the average of a car’s highway and city miles.
Failing a safety inspection means your vehicle did not meet the state requirements and is technically unsafe to drive. For example, your car may fail a safety inspection due to problems with its safety equipment, issues with display components like a speedometer, broken lights, clogged filters, or simply because the check engine light is on. Failing an inspection will result in a mark or sticker indicating your vehicle needs to be inspected again after the appropriate repairs have taken place.
A fire brand on a vehicle means the car has been damaged due to flames, smoke, or other fire-related emissions. Many of these vehicles will receive a salvage title, with paperwork indicating that the damage they received was due to a fire. Make sure any fire-damaged vehicle you are considering purchasing has been closely inspected, especially if the source of the fire was the vehicle’s own internal components.
Financial incentives for a vehicle are discounts and rebates offered by a dealership, manufacturer, or government organization. For dealerships and manufacturers, financial incentives tend to take money off the sales price or monthly payments when you purchase a certain vehicle type. For government organizations, the incentive may relate to tax breaks (for example, the EV tax credits offered by the U.S. government).
Fleet vehicles are cars or trucks, often purchased in bulk, that are used exclusively by a business or government. Common fleet vehicles include those bought by rental car companies, law enforcement, and emergency services. These organizations may sell fleet vehicles to used-car lots where civilians can purchase them. Fleet vehicles are often offered at reasonable prices due to the level of wear and tear they experience during their lifetime.
If a car had previously been used as a rental, it might receive a former rental title brand. Be wary when purchasing these vehicles, as they tend to have extensive wear and tear. They will also almost always have high mileage, making them problematic choices if you intend to use them for any significant amount of time.
Guaranteed Asset Protection insurance, or Gap insurance, is an optional coverage designed to cover the difference between a car’s actual cash value and the amount owed on the vehicle through financing. Gap insurance is good coverage to get if your car is worth less than you owe on the loan.
Government use of vehicles refers to vehicles that are loaned, leased, or sold for the express use of a government entity. These entities can be at the local, county, state, and federal levels. Some government vehicles are exempt from certain payments, including registration fees and taxes.
Whenever a vehicle is manufactured in a foreign market outside of the United States (for use outside the U.S.) and transferred into the country, it will receive a gray market title brand. In the case of a non-compliant gray market brand, the vehicle in question does not fit the criteria to meet federal standards.
Gross capitalized cost refers to the value of a vehicle before you lease it (before you subtract any capital cost reductions). This number is agreed upon by both you and the lessor through negotiations. The gross capitalized cost includes all fees, taxes, insurance, and the total balance of your lease.
The Gross Vehicle Weight Rating is a standard designed to set a maximum safe weight for any given vehicle. This weight is based on a combination of the vehicle’s components, fuel, passengers, accessories, cargo, and in some cases, the weight of a tow trailer.
The gas guzzler tax is an extra fee paid on vehicles that do not meet specific fuel economy criteria. It’s designed to discourage the production and sale of cars that may harm the environment due to fuel inefficiency. The gas guzzler tax usually only applies to passenger cars and varies in precise quantity. The amount of the tax should be available on the window sticker of a vehicle; the more inefficient the car, the higher the tax will be.
This brand is the same as above, with a vehicle manufactured outside the United States being brought into the country. The difference is that a compliant gray market brand indicates the vehicle does meet all necessary federal standards.
A gray market vehicle, sometimes referred to as an overseas vehicle, is a vehicle brought into the United States from another country. The owners of these vehicles seek to title and register the car for use in the U.S.; for a car to qualify as a gray market vehicle, it cannot have been titled in the United States before.
Gross polluter refers to vehicles that fail certain emissions standards and contribute significantly to pollution. For a car to qualify as a gross polluter, its emissions levels must exceed government-established criteria during an inspection. Gross polluter vehicles will often emit an excessive amount of black or white smoke. White smoke tends to come from a damaged tailpipe or gasket, while black smoke usually comes from a damaged muffler.
A hail brand is given to vehicles that have suffered hail damage. Hail-damaged cars are often in sub-par condition; while they may be offered at a discount, they can be challenging to insure. Even if a car lacks a hail brand, you can tell a vehicle has been damaged by a few common signs: numerous large or small dents in the exterior, multiple chips or cracks in the glass, and water damage (from after the hail has melted).
A high-speed crash test vehicle is used to test safety designs and measure a vehicle’s ability to withstand impact. These are often regular models from a manufacturer that are used exclusively to collect crash data. How well these vehicles withstand impact is rated by two organizations in the United States: the NHTSA and the IIHS.
A hybrid vehicle is any car that uses a hybrid power source, combining an electric motor and a gas motor as a propulsion system. Energy for the electric motors in these vehicles is usually provided by regenerative braking, while the internal combustion engine is fueled by gasoline (or another fuel type).
Vehicles used to transport hazardous materials, cars near the chemical site, or any other vehicle exposed to dangerous substances can receive this title brand. These hazardous materials can be flammables, explosives, fire accelerants, or toxic to humans or the environment. Whatever the material, vehicles with this brand should be avoided.
Horsepower is a unit that measures how powerful a vehicle is, specifically the output capabilities of its engine or motor. These units are referred to as horsepower because they were initially used to compare the output of draft horses to steam engines, with one “mechanical horsepower” able to lift 550 pounds by one foot in one second.
A hybrid power source is a combination of electric motors and an internal combustion engine. These power sources are used in plug-in hybrids, fuel cell electrics, pneumatic or compressed air cars, as well as gas/electric hybrids.
Ignition timing refers to the release of a spark in an internal combustion engine relative to the current angle of the crankshaft and the current position of the piston. This timing happens during what’s known as the compression stroke, which is when the piston travels up the cylinder as the intake valve closes. Without correct ignition timing, engines cannot perform properly, leading to vibrations and subsequent damage.
An independent inspection is conducted outside of a manufacturer or dealership, usually by a third party. These are done to ensure that a vehicle has no mechanical issues that the first inspection may have missed. Independent inspections may also have more stringent standards and have specialized tools to test cars in ways a dealership cannot.
Vehicle inspections are mandatory, and in some cases optional, examinations of your vehicle. These inspections can be required to acquire a registration, vehicle license, or license plate and may need to occur annually or bi-annually. In the United States, common inspection types include safety inspections, VIN inspections, and emissions inspections.
Found on a dealer invoice, an invoice price is a cost that a dealership or retailer will pay to a manufacturer for the right to distribute their vehicles. This price includes any fees and taxes and can be negotiated by a dealership. Manufacturers will also offer discounts to dealerships in the form of incentives to encourage them to sell certain model lineups.
When a vehicle is purchased outside of the United States to bring it into the country, it will need an import title. This documentation can help show customs the vehicle’s intended purpose and help you track the car as it travels into the country.
If a car is deconstructed or disassembled for any purpose and made inoperable, it may receive an inoperable vehicle title brand. In this case, the car has been moved to a public street or highway while still in a nonoperational state but will lack proper registration. The vehicle could qualify as a salvage car, but the big difference in its non-functioning state is intentional. This title brand will be removed once the car is reassembled and passes state criteria to make it road legal.
Car insurance records are made up of several different documents that track your auto insurance history. These documents include the declarations page of your auto insurance policy, insurance card, claim documents, and monthly billing statements. Car insurance records allow insurers to assess the risk associated with providing you with a policy. Depending on the content, these records may affect how much you pay in premiums.
In a related non-motor vehicle agency report, this vehicle has been deemed incapable of safely operating on public roads and highways. These vehicles are intended to be stripped for parts or sold as scrap. It is a process that should take place within a set period (depending on the agency) after the car is declared junk.
A junk title is given to a vehicle that has no value left except for what it’s worth in scrap and parts. Unlike salvage-titled cars, which can be repaired, inspected, and retitled, junk-titled vehicles will rarely be able to be driven legally again. Vehicles with this title have experienced extensive damage to their frame or internal components and (in almost every case) cannot receive a new title.
A keyless ignition system allows drivers to start their vehicles without using a physical key. A fob and an interior button usually facilitate keyless ignition; by pressing the button when the fob is in range, your vehicle will recognize your presence and allow you to activate the engine. Keyless ignitions may also have auxiliary features, including alert systems that let you know when you may be locking your car with the fob still inside.
If a vehicle is built with various parts, it may receive a kit title brand. These cars are constructed using different chassis, frames, engines, and other auto parts that often have non-matching VINs. In this case, the VIN used on official paperwork and cataloged by the DMV is almost always the one present on the chassis.
A lane departure warning system is a modern safety feature that warns drivers when they are drifting into another lane. There are four primary types: lane departure warning (LDW), which warns drivers with vibrations, visuals, or an audible noise; lane centering assist (LCA), which assists a driver in keeping them centered on a road; lane keeping assist, which automatically takes over steering to keep a vehicle in its lane; and automated lane-keeping systems, which is part of a fully autonomous driving system.
A lease extension adds time to your existing lease terms, usually between six and twelve months. Lease extensions are an excellent tool for those who want to continue driving their current car model but aren’t quite ready for a lease buyout. You can also use a lease extension to wait out a volatile period of time in the vehicle market.
Lemon laws refer to federal and state legislation that prevents scammers from selling vehicles that don’t meet specific quality and performance standards. Consumers who purchase a car with a significant mechanical defect are entitled to a refund or replacement. If a dealership buys the vehicle, it’s their responsibility to inspect it. If you believe you have been sold a lemon car, but the dealership won’t admit it, you may be necessary to contact a lemon law attorney.
A lessor is an entity that allows a person to use a particular asset. For car leases, this means drafting a contract that allows someone to operate a vehicle for a set period of time. Lessors can create terms that the lessee has to follow, including the need to carry certain insurance coverages, adhere to specific mileage limits, and pay additional fees.
A limited production vehicle is a model with a restricted production volume. Because there are only so many of these vehicles, they are often rare and hard to find. This makes them more expensive, with many limited production vehicles being purchased by collectors. Limited production vehicles may have special interiors, trim, expensive components, or other material requirements that make them difficult to mass produce.
A car loan is a financing plan that allows you to make monthly payments on a vehicle instead of paying the full sales price upfront. Loans consist of the amount (or value of the car), the percentage you’ll pay on that loan each year (annual percentage rate, or APR), and the term within which you’ll need to pay back the loan.
Lending loss is an insurance term that refers to a lender’s guarantee that they will be paid for collateral. In this case, a loss payee is used to reduce loan defaults. This occurs if you do not lose your lender as what is known as a loss payee, leading them to place what is known as “forced placed insurance” on whatever you put as your collateral. You can avoid this by keeping up with your payments and preventing your insurance from lapsing.
Low-interest financing is a loan or lease that uses interest rates below the current market standard. This type of financing is usually offered as an incentive to increase sales or move specific lower-selling vehicle models. Low-interest financing is commonly provided with a “no down payment” incentive but may require you to meet certain criteria to qualify. This criterion usually pertains to your credit score; for many lenders, you’ll need excellent credit to be eligible for a low-interest financing plan.
A lease is a financing tool that allows you to drive a new or used vehicle without owning it. Leases differ from loans because, at the end of a loan, you own the vehicle. With a lease, you are essentially renting the car and will be required to return it at the end of your terms. Like loans, leases require monthly payments; you may also need to carry additional insurance types and adhere to specific restrictions (like not exceeding a certain mileage).
A lease term refers to the period of time you have access to your leased vehicle. Your lease contract will detail your term, which usually falls into two primary types: closed-end and open-end. A closed-end lease will have an exact date that your terms will expire, while an open-end lease doesn’t have a precise deadline. Instead, open-end leases will have a window within which you can return the vehicle. Failing to return your vehicle in either lease type will usually result in a penalty.
A lessee is a person who leases a vehicle or other type of property. For car leases, this means signing a contract and following the terms set by the lessor. Lessees essentially “rent” the car, having temporary ownership for a certain period of time. Failure to meet the terms of their lease or falling behind on payments may result in a lessee losing access to the leased vehicle.
A lien is a legal claim against an asset. In the case of a lien on a car, lenders (or lienholders) will hold a vehicle’s title until the associated loan is fully paid. Much like with leases, lienholders can require that borrowers retain specific insurance policies and make regular monthly payments. If payments are not made, a lienholder has (in many cases) the right to repossess the vehicle.
A limited warranty, or bumper-to-bumper warranty, is a type of coverage that usually comes standard when a vehicle is purchased from a dealership. Referred to as “limited” due to how long they last, these warranties will cover almost every component of your vehicle. Many limited warranties will only cover your car for a certain number of months or miles, leading many drivers to get extended warranties.
If a vehicle is used primarily on private roads and used for logging purposes, it will usually receive a logging vehicle title. These vehicles are used exclusively to transport forestry goods like lumber to and from where those materials are harvested.
A low-emission vehicle, or LEV, is a vehicle that does not emit a significant amount of polluting emissions. While all-electric vehicles may fall under this category, low-emission vehicles usually refer to gas-powered cars. Despite their fuel source, manufacturers have designed these vehicles to emit the lowest amount of CO2 and other pollutants possible.
Major damage incidents are accidents that result in significant damage to any of the involved vehicles. In most cases, this damage results in the cars being declared “totaled,” making them inoperable. These occurrences differ from a minor damage incident, which tends to result in nothing more than a dent, scratch, or non-essential broken vehicle part.
Manufacturer buybacks are vehicles that a manufacturer will repurchase, inspect, repair, and subsequently resold. These vehicles are usually repurchased due to a complaint by a customer, a violation of lemon law, or a previously unknown defect within the vehicle’s internal mechanics. Manufacturer buyback vehicles often have to meet a strict code of criteria before being resold, offering significant value to drivers who seek to get a good deal on a used car.
If a title is inactive and used simply for clerical purposes, it will be known as a memorandum copy. This is not valid and can’t legally serve as a replacement document for an active legal title.
Mileage discrepancy is the misrepresentation of a vehicle’s mileage, either verbally, on official documents, or through manipulation of its odometer. Mileage discrepancy is most commonly used to hide high mileage, as this can make it easier for unscrupulous sellers to offload old, more worn vehicles. If the method of mileage discrepancy a seller uses involves tampering with the odometer, it’s known as odometer rollback.
A Monroney sticker is a window decal that contains information relating to a new vehicle. According to the Automobile Information Disclosure Act of 1958, dealerships are legally required to include Monroney stickers on their vehicles. These stickers contain various important details, including the manufacturer’s suggested retail price, safety ratings, crash test scores, fuel economy, environmental impact, standard equipment, engine and transmission details, make and model, vehicle options pricing, and warranty information.
A manual transmission, or manual gearbox, is a system designed to change between a vehicle’s gears. It is operated manually by the driver, as opposed to an automatic transmission, which will shift gears once the car reaches a certain speed. Manual transmissions are operated using a gear stick, which allows the driver to cycle between various numbered gears, and a clutch, which lets the driver control how much torque is transmitted from a motor to the transmission.
A manufacturer recall is issued when a manufacturer finds that one of their vehicles has a previously unknown defect that requires repair. These defects may create a safety hazard or cause the vehicles not to meet the manufacturer’s standards. The National Highway Traffic and Safety Commission can also call recalls if they spot a safety risk; in these (and most cases), all costs associated with repairing the vehicle fall to the manufacturer.
Mileage allowance refers to how much mileage a driver can deduct regarding their associated expenses. The Internal Revenue Service (IRS) sets an allowance each year, allowing taxpayers to use this allowance to calculate their operational costs for tax-deduction purposes. In addition, taxpayers can calculate the prices on their own instead of using the IRS mileage allowance.
The lease money factor, or money factor, refers to the interest rate you’ll have to pay to lease a vehicle. Like an annual percentage rate, a money factor will account for some of your monthly lease payments (in addition to fees, taxes, and any additional costs). Dealers calculate a money factor by combining the capitalized cost and residual value, multiplying it by the lease term, and dividing the lease charge by the result.
The manufacturer’s suggested retail price, or MSRP, is the price point a manufacturer recommends that a particular vehicle be sold at. Sometimes referred to as a “sticker price” due to many dealerships displaying this number as a large sticker on their vehicles, an MSRP isn’t necessarily the final sales price of a car. Many dealerships will discount vehicles with lower sales volume or allow customers to negotiate below the MSRP.
