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Learn the Lingo

Get familiar with some of the key words and phrases you're likely to come across as you navigate money management, auto financing and vehicle ownership.


An administrative fee charged at the start of your lease. 

Allowed Mileage

The number of miles you can drive your leased vehicle without paying an extra charge — usually 10,000 to 15,000 miles per year.

Annual Percentage Rate (APR)

The cost of credit expressed as a yearly rate.


A plan to help you manage your money, including your income, monthly expenses and savings.

Captive Lender

A company provides financing to customers of its parent company.


A contract for the sale of a vehicle according to the payment terms and other terms set forth in the contract.


The money that you can use, and then pay back with interest over time.

Credit Bureau

A company that collects information to generate your credit report and calculate a score to help lenders determine your credit risk.

Credit Report

A summary of your credit history, including payment history, open accounts and debt owed.

Credit Score

A three-digit number based on your credit history that helps lenders determine risk.


A financing source that offers you credit.

Depreciation Charge

The amount you pay each month to cover your leased vehicle's projected decline in value from normal use.

Disposition Fee

A flat-rate fee, outlined in the lease agreement, charged to GM Financial lessees after returning their vehicle. The fee covers the cost of preparing the vehicle for resale.

Down Payment

The money you provide upfront to reduce the total amount you plan to finance.

Expected Depreciation

The amount your vehicle is expected to decrease in value from normal use over a period of time.

Extended Warranty

An optional service contract that goes beyond the standard manufacturer warranty to cover certain repairs and services.

Finance Charge

The cost of credit, including interest and other fees, expressed as a dollar amount.

Gross Capitalized Cost

The agreed-upon price of your leased vehicle, plus the cost of additional items you agree to pay for over the lease term — like prior lease balances, insurances, taxes, fees or optional products such as service contracts, also known as "Cap Cost."

Guaranteed Asset Protection (GAP) Insurance

An optional insuranace plan that pays the difference between how much you owe on your vehicle and how much your vehicle is worth in the event it is damaged, stolen or destroyed before you have paid off your amount financed.


The direct cost of using credit.


An agreement that allows the customer, or lessee, the right to use the vehicle during a particular period of time in accordance with the terms of the agreement.


A financing source that makes funds available to you with the expectation of being repaid.

Lien Holder

A creditor whose debt is secured by a right to possess the vehicle if certain terms of the agreement are not met. In auto finance, it generally refers to a financing source that has provided financing to help you purchase the vehicle. If you fail to make scheduled payments, the lien holder may take possession of and sell your vehicle to help pay your debt.

Residual Value

The estimated end-of-term value of your vehicle that is established at the beginning of the lease and is used to calculate monthly lease payment.

Retail Installment Contract

A contract for the sale of a vehicle according to the payment terms and other terms set forth in the contract.


The period of months for which a loan, lease or retail installment contract is written.

Trade-In Allowance

The amount a dealership offers you in exchange for the vehicle you trade in, which is credited toward the purchase or lease of a different vehicle.

Upfront Costs

The initial money you pay out of pocket, such as a down payment, registration fees and taxes.

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