GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

Automotive Terms and Acronyms

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Alberta Motor Association — Personal Vehicle Tax
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Alberta Motor Association (AMA)Company, Alberta, Canada
  ➥  Provincial branch of Canadian Automobile Association / American Automobile Association.
Alberta Motor Vehicle Industry Council (AMVIC)Company Est.1999, Alberta, Canada
all terrain vehicle (ATV)Acronym
amount due at lease signingDefinition (Lease) (Automotive)
The total amount due before the consumer can take delivery of a leased vehicle. It can include any security deposit, title fee, capitalized cost reduction, monthly payments paid at signing and registration fees.
anti-lock braking system (ABS)Acronym
automobile liability insuranceDefinition (Accident Insurance, Insurance, Liability Insurance) (Automotive, Insurance)
Insurance coverage for damages caused in traffic collisions.
Automobile Protection Association (APA)Company Est.1969, Toronto, Ontario, Canada
average lease value (ALV)Acronym (Lease)
base priceDefinition (Automotive)
The cost of a car without options. This price includes standard equipment and the manufacturer's warranty.
blue bookDefinition (Automotive)
Formally, it refers to the Kelley Blue Book, an industry guide dealers use to estimate wholesale and retail vehicle pricing.
bootDefinition (Banking, Realty) (Automotive, Real-estate, Financial-banking)
Cash or other property used in an exchange to make the values of property traded equal. For instance, if you trade in a delivery truck on a new model, the cash you pay in addition to your old truck is boot.
Canadian Loss Experience Automobile Rating (CLEAR)British Columbia, Canada
capitalized costDefinition (Automotive)
A leasing term that refers to the price of the car. The lower the capitalized cost, the lower the monthly lease payment. The cap cost is negotiable and can be reduced by a cash down payment, trade-in or a manufacturer's rebate; it can be increased by the loan acquisition fee or costs left over from a previous lease.
casualty and collision (CASCO)Acronym (Accident Insurance, Insurance)
casualty insuranceDefinition (Insurance) (Automotive, Insurance)
Insurance that covers losses and liability from injuries to others and/or damage to the property of others.
closed-end leaseDefinition (Banking, Lease) (Automotive, Financial-banking)
The most common type of car lease. The lessee may return the car at the end of the lease term, pay any end-of-lease costs, such as the disposition fee, and the lease agreement is over. In a closed-end lease, the lender assumes the risk of predicting the value of the vehicle (its residual value) at the end of the lease's term. Closed-end lease payments are somewhat higher than open-end lease payments.
collision insuranceDefinition (Accident Insurance, Insurance) (Automotive, Insurance)
Auto insurance that provides coverage for damages to the policyholder's vehicle in the event that the policyholder is at fault in a traffic collision.
comprehensive insuranceDefinition (Accident Insurance, Insurance) (Automotive, Insurance)
Auto insurance that covers damages not resulting from a collision, and for vehicle theft.
destination chargeDefinition (Automotive)
A fee charged for transporting a vehicle to the dealer from the manufacturer or port of entry. This charge is passed on to the buyer without any mark-up.
disposition feeDefinition (Automotive)
A fee charged by some lessors at the end of a lease where the customer pays for the privilege of returning the vehicle.
driver's fatal accident policy (DFAP)Acronym (Accident Insurance, Insurance)
early termination chargeDefinition (Automotive)
Charges that the leasee must pay if the car is turned in early before the term of the lease is over.
excess wear chargeDefinition (Lease) (Automotive)
Most leases set limits for wear and tear on the car during the lease term. The lessee must pay charges for exceeding the limits when turning in the car at the end of the lease.
extended warrantyDefinition (Banking, Contract, Legal) (Automotive, Financial-banking, Legal-contracts)
A service contract that covers certain vehicle repairs or problems after the manufacturer's or dealer's warranty expires. Extended warranties are sold by vehicle manufacturers, dealers, and independent companies. With a new vehicle, the extended warranty must be purchased by the end of the first year of ownership.
factory based price (FBP)Acronym (Lease)
financial responsibility lawsDefinition (Contract, Legal, Insurance, Finance) (Automotive, Insurance, Legal-contracts)
A type of law that requires an entity to be capable of paying for damages in the event of a potential claim.
first dollar coverageDefinition (Insurance) (Automotive, Insurance)
Insurance coverage that does not require the insured to pay a deductible.
gap insuranceDefinition (Accident Insurance, Insurance) (Automotive, Insurance)
A type of insurance offered to auto lease customers. This type of insurance covers the difference in value between a vehicle's book value and the amount remaining on a vehicles financing or lease, if such a difference exists.
General Motors (GM)Company Est.1908, International
glass damage waiver (GDW)Acronym (Insurance, Auto Insurance)
gross market value (GMV)Acronym (Realty, Appraisal)
high risk auto insuranceDefinition (Accident Insurance, Insurance) (Automotive, Insurance)
Auto insurance for drivers with an increased risk of collisions.
Honda Canada Finance, Inc (HCFI)Company Est.1987, Canada
  ➥  Provides financing and leasing options for Canadian consumers.
illiquid assetDefinition (Banking, Contract, Legal, Investment) (Automotive, Investments, Financial-banking, Legal-contracts)
An asset that cannot be sold easily or in a timely manner for its full value.
insurance fraudDefinition (Insurance) (Automotive, Insurance)
An illegal attempt by an individual or entity to receive insurance benefits that they would otherwise not be entitled to or for an insurance company to deny a legitimate insurance claim.
lease (lse)Definition (Banking, Property Listing, Lease, Classifieds) (Automotive, Financial-banking, Abbreviation)
A written agreement in which the property owner allows a tenant to use property in exchange for rent, and for a specified period. Or, a written agreement in which a car dealer allows a consumer to use a vehicle in exchange for payments for a specified period.
Manheim Automotive Financial Services (MAFS)Company, US and Canada
manufacturer's suggested retail price (MSRP)Definition (Automotive, Financial-banking)
Stands for Manufacturer's Suggested Retail Price. It represents the manufacturer's recommended selling price for a vehicle and each of its options.
Mercedes-Benz Financial Services (MBFS)Company, Mississauga, Ontario, Canada
mileage allowanceDefinition (Automotive)
The number of miles, specified in a lease, that a car may be driven over the life of the lease.
mint conditionDefinition (Banking, Realty) (Automotive, Real-estate, Financial-banking)
A term describing a building or item that's just like new.
money factorDefinition (Banking) (Automotive, Financial-banking)
A leasing term that expresses the cost of borrowing. It is similar to the interest rate paid on a conventional car loan, but it is expressed as a difficult-to-understand fraction. To convert the money factor to a recognizable interest rate, multiply it by 24. For example, a money factor of .00345 x 24 = 9 percent interest. The money factor is negotiable, and consumers who lease a new car should look for a money factor close to the current interest rate charged for new-car loans.
mop and glowDefinition (Automotive)
A term used inside the car industry to refer to add-ons, especially paint sealant, that do little to add to the value of a car, but a great deal to add to the dealer's profit.
motor vehicle extended service contract (MVESC)Acronym (Warranties)
  ➥  A dealer warranty.
negative-equity financingDefinition (Finance) (Automotive)
Financing for new car buyers who owe more on their trade-in than the car is worth.
open market value (OMV)Acronym (Stock Market, Realty, Investment)
Price an asset should achieve when sold on an open or competitive market.
open-end leaseDefinition (Banking, Lease) (Automotive, Financial-banking)
Sometimes called a finance lease. It usually offers lower payments, but carries a risk for the consumer. Under an open-end lease, the lessee must pay any difference between the residual value of the car as stated in the lease and the fair market value of the car, if lower, at the end of the lease. The lessor pays for the appraisal that sets the value. If the consumer doesn't agree with it, the consumer may pay for a binding, independent appraisal by someone agreed to by both parties.
optionsDefinition (Automotive)
Also known as add-ons. These are features added to the car often by the dealer such as a CD stereo, anti-theft system, detailing and undercoating. Some items are purely decorative, known as "mop and glow," and do not add any value to the car.
owner will finance (OWF)Acronym (Loan, Realty)
personal vehicle tax (PVT)Toronto, Ontario, Canada
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Alberta Motor Association — Personal Vehicle Tax
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Index of Automotive Terms

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