Glossary
Welcome to The Golden 1 Discount Auto BuyingSM program Glossary, which features definitions of terms commonly used on our site.
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
A
Actual Depreciation
Decrease in a vehicle's value due to passage of time and day-to-day wear and tear.
Adjusted Capitalized Cost
The net dollar value that is amortized over the term of lease, obtained by subtracting the Capitalized Cost Reduction from the Capitalized Cost.
Advertising Fee
An amount charged to the dealer to cover the cost of national and local advertising. This fee is passed to the buyer excluding any markup and may be viewed on the invoice.
Amortization
Paying down a debt by making regular payments of principal and interest.
Annual Percentage Rate (APR)
Cost of credit paid by a consumer, described as a percentage. Also referred to as APR.
Auto Insurance
Automobile protection that pays for damage or injury you cause to others while driving your car, and damage to your car or injury to you or others in your car from an auto accident.
Authorization Number
A number assigned to members which authorizes them to see the low, pre-arranged discount pricing Value Sheet at a participating dealership.
Automatic Payments
Payments that are automatically deducted from a checking or savings account.
B
Base Invoice Price
The cost of a vehicle before options are added, but including standard equipment, factory warranty, freight, advertising and destination fees.
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C
Capitalized Cost
Total value of the car upon which a lease is based, similar to the selling price of an automobile.
Capitalized Cost Reduction
Also considered a "down payment." Can be in the form of cash, trade-in net allowance, or rebates. Results in the Adjusted Capitalized Cost when subtracted from the Capitalized Cost.
Collateral
Personal property or money offered as a security against defaulting on a loan.
Collision Insurance
Vehicle protection that covers damage to your car or someone else's when involved in an accident that you or someone else causes.
Comprehensive Insurance
Vehicle protection that covers damage you cause to someone else's property (i.e. running into a parked car or a garage door.) Also, if damage is done to your car in a non-accident situation, like vandalism or a tree falling on it during a storm, this coverage will pay for the expenses, excluding a deductible amount, if any.
Credit Union Direct Lending
A program designed to provide point-of-sale lending to credit union members. Also known as CUDL.
Customer Service Index
A rating system for auto dealerships, based on the consumer's overall purchasing experiences.
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D
Dealer Specialist
An individual at the dealership who knows the specifics of The Golden 1 Discount Auto BuyingSM program and has been counseled about the sales process and the service The Golden 1 Discount Auto program expects for members. This is the only person who can ensure the customer receives the guaranteed pre-arranged price of the vehicle.
Debt Instrument
Written promise to pay.
Default
Failure of a debtor to meet an obligation on a debt.
Depreciation
The difference between a vehicle's original value and its value at lease-end.
Depreciation Charge
The amount a lessor charges a customer for loss of value in property due to any cause over the period of the lease, including physical deterioration, functional obsolescence and external obsolescence.
Destination Charge
The fee charged for shipping, freight, or delivery of the vehicle to the dealer from the manufacturer or port of entry. This charge is passed to the buyer excluding any mark-up.
Down Payment
Money paid to make up the difference between the purchase price and the loan amount.
E
Equipment Package
Accessory groups that may be purchased separately to enhance the vehicle's performance, appearance or value.
Extended Warranty Package
A contract that covers specified breakdowns after a manufacturer's warranty expires. Manufacturers and independent companies sell extended warranties.
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F
Finance Charge
Cost of credit, including interest, that is paid by a member for a loan.
Financing
The act of paying for a purchase over a period of time.
G
Good Faith Estimate
A credit union's reasonable estimate of all charges associated with a loan.
Guaranteed Asset Protection (GAP)
Additional car protection that pays the difference between an insurance settlement and the balance of an auto loan in the event that the vehicle is declared a total loss after a theft or accident. This protection can be financed as part of your Golden 1 auto loan.
H
I
Installment Loan
A loan paid at regular times over a specified period of time.
Interest
The cost of borrowing money, usually stated in terms of an annual percentage rate.
Interest Rate
The fee charged for borrowing money or credit, expressed as an annual percentage rate over a specific period of time.
J
K
Kelley Blue Book
A publication that determines the value of cars and trucks in a specific market area. A recognized wholesale appraisal guidebook provides guidance on the auto's value at any given time.
L
Leasing
A method of paying for the use of a car over a specified term.
Liability Insurance
Coverage that protects you or anyone else permitted to drive your car.
Loan Payments
Monetary installments paid, usually on a monthly basis, to the financier of the automobile for the agreed length of term, at a specific interest rate.
Lowest Posted Price
The lowest dollar amount advertised by the dealership. Advertisements can include but are not limited to web, newspaper and the posted price listed on the vehicle.
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M
Mechanical Breakdown Insurance (MBI)
Similar to an extended warranty, this additional insurance may be purchased to cover the cost of automobile breakdowns. This purchase can be financed as part of your Golden 1 auto loan.
Money Factor
Money factor is the equivalent of the annual percentage interest rate (APR) in a conventional loan, and is usually specified as a decimal fraction such as 0.00345. These numbers are set by the leasing company.
Monthly Payments
Monetary installments on an auto loan or lease, determined by the length of the loan or lease and paid each month to the lender or lease company.
MSRP
The "Manufacturer's Suggested Retail Price" is the factory-recommended selling price for a vehicle and each of its optional accessories.
N
Negative Trade
A situation in which the allowance given for a trade-in vehicle is exceeded by the amount required to release the liens against an owned trade-in vehicle or to pay off the lease of a leased trade-in vehicle.
O
Options
Vehicle features not included in the base model, but available at an extra price.
P
Pre-approval
A credit union’s promise to provide you with a loan for a set amount of money.
Pre-arranged Price
The cost of a vehicle that The Golden 1 Discount Auto program dealers have agreed to charge members based on an amount from invoice or MSRP.
Prepayment Penalty
Fee paid by borrower if a loan is paid off in advance. It is intended to compensate the lender for loss of income in future years.
Principal
Face value of debt, not including interest owed.
Principal Charge
- A sum loaned or employed as a fund or an investment, as distinguished from its income or profits.
- The original amount (as in a loan) of the total amount due and payable by a certain date.
Q
R
Repossession
The act of a financial institution taking possession of the collateral for failure to repay a loan.
Retail Installment Contract
The contract drawn between the credit union and member that details the monthly and total amount the buyer pays for an auto.
Residual Value
This is the estimated value of the vehicle at the end of the lease term. Residual values are set by the leasing company, and are based partly on the length of the lease and the history of resale value for the specific model. In a closed-end lease, you have the option of purchasing the vehicle for the residual value at the end of the lease. Residual value is often specified as a percentage of Manufacturers Suggested Retail Price (MSRP), the window sticker price.
Roadside Assistance
Emergency auto services available in the event of vehicle failure. These services usually include towing, gas or fuel delivery, locksmith service, battery & tire aid and even minor mechanical adjustments.
S
Secured Loan
A loan that is secured by the borrower’s personal property or money.
Simple Interest
A method of calculating interest due by applying a periodic rate to the outstanding balance on a daily basis. As payments are received they are applied first to the accrued interest and then to the principal amount.
Subvented Deals
Leasing companies each set their own residual numbers and adjust residuals and/or money factor rates on slow selling vehicles so that they can offer better lease values.
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T
Term
The length of an auto loan or lease agreement.
Trade-in Value
The amount that a dealership will credit you for your vehicle, for use as partial or full payment for another vehicle.
Truth-in-Lending Act
A federal law requiring a disclosure of credit terms, interest rate, fees and charges using a standard format. This is intended to facilitate comparisons between the lending terms of different financial institutions.
U
V
Value Sheet
The Golden 1 Discount Auto program document at the dealership that shows the maximum markup (either above factory invoice or below MSRP) the dealer has agreed to charge Golden 1 members. The member should ask to see this form when meeting with the Dealer Specialist at the dealership.
W
Warranty
This written agreement states that the manufacturer will repair or replace specified parts of the vehicle in the event of a mechanical malfunction for a limited amount of time or miles. Also called the basic factory warranty.
X
Y
Z
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