Auto LoansGAP
Guaranteed Asset Protection (GAP Insurance)
Auto insurance coverage that pays the difference between a vehicle’s actual cash value and the remaining loan balance after a total loss.
📚 Financial Knowledge Base
Financial Industry Glossary & Underwriting Guide
Master essential home mortgage, auto financing, interest rate, and underwriting terminology with interactive calculators, mathematical formulas, and practical lending guidelines.
Terms Starting With "P"
Showing 8 definitionsAuto Loans
Vehicle Depreciation
The decline in a vehicle’s market value over time caused by age, wear, mileage, and market conditions.
Auto Loans
Subprime Auto Loan
Vehicle financing extended to borrowers with low credit scores (typically below 620), featuring higher interest rates and strict terms.
Auto LoansMF
Auto Lease Money Factor (Lease Fee)
A fractional decimal interest rate (such as 0.00250) used by automotive captive finance companies to calculate the monthly finance charge on a vehicle lease.
Auto Loans
Lease Residual Value
The leasing bank’s guaranteed wholesale value projection of a vehicle at the end of the lease term, expressed as a percentage of the original MSRP.
Auto Loans
Capitalized Cost & Cap Cost Reduction
The negotiated selling price of a leased vehicle (Gross Capitalized Cost) and any upfront cash down payment, trade-in equity, or manufacturer rebates that reduce the financed lease balance.
Auto Loans
Negative Equity Rollover (Underwater Trade-In)
The practice of folding the unpaid loan deficiency from an underwater trade-in vehicle into the principal balance of a brand-new auto loan or lease.
Auto Loans
Vehicle Title Loan
A high-cost, short-term predatory loan collateralized by a borrower’s unencumbered motor vehicle title, typically charging 15% to 25% monthly finance fees (180% to 300% APR).