Auto Loan Glossary

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As is

A vehicle that’s sold with no guaranteed level of quality in terms of its condition, maintenance, road-worthiness and ability to register it.

All-in pricing

A law that requires the price of a vehicle to include all fees and charges.

Amortization amount

The total amount owed on a lease contract. It’s calculated by subtracting the vehicle’s expected value at the end of the term from the vehicle's original price.

Annual percentage rate (APR)

The annual cost of borrowing, expressed as a percentage of the total vehicle price.

Certified pre-owned (CPO)

A used vehicle that has undergone and passed an inspection process certified by the manufacturer.

Demo (demonstrator) car

A car that has only ever been registered to a dealer or wholesaler for the purpose of allowing potential customers to test drive it.

Down payment

The payment made at the beginning of the auto loan in order to lower the total amount financed.

Lease

A legally binding contract in which the lessee makes periodic payments to the lessor to use a vehicle for a specified length of time.

Lessee

The party in a lease agreement that pays the lessor for the right to drive the vehicle for a pre-determined period of time.

Lessor

The party in a lease agreement that forgoes possession of the vehicle in exchange for pre-determined, periodic payments from the lessee.

Lien

A lender's right to a vehicle that continues until the borrower fulfils the conditions that were agreed upon in the contract.

MSRP

This stands for “Manufacturer's Suggested Retail Price”. This is also known as the "list price".

Residual value

The amount a vehicle is expected to be worth at the end of the lease term.

Subprime Loan

A type of loan with higher than usual down payments and interest rates, usually, due to the borrower’s lower credit rating, vehicle age or high mileage.

Trade-in value

The allowance toward a purchase given by the dealer in exchange for the used vehicle being traded in.

Vehicle Identification Number (VIN)

A unique 17-digit code assigned to all vehicles in North America.

Warranty

A dealer’s or manufacturer's written promise to repair or replace a purchased vehicle's components free of charge within a specified period of time.

StartRight Auto Finance Program

A program that provides auto financing for Foreign Workers and Landed Immigrants who have been in Canada for 3 years or less.

EcoLiving Auto Loan Program

A program designed for environmentally conscious customers who want to buy a new eligible hybrid, electric or clean diesel vehicles.

Grad Auto Loan Program

A program that helps graduating students buy a new or used vehicle.

Marine Loan

A loan that helps people finance the purchase of a new or used powerboat, sailboat or outboard motor.

Recreational Vehicle (RV) Loan

A type of loan created to finance Recreational Vehicles.

Motorcycle & Leisure Vehicle Loan

A loan that helps people finance powersport vehicles like: motorcycles, all-terrain vehicles, snowmobiles and personal watercraft.

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