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GMAC Glossary


Leasing Terms

ANNUAL PERCENTAGE RATE:


The interest rate used in the calculation of the monthly lease payment.


CAP COST REDUCTION:


This is simply a down payment to reduce the vehicle price or "cap cost" of the vehicle. It can take the form of either a cash down payment or a vehicle trade-in and is applied to the lease at the time of lease signing. A cap cost reduction helps to reduce your monthly payment.


CAPITALIZED COST:


Commonly referred to as the "Cap Cost", this is the lease price plus any other items included in the lease such as extended service contracts, life, accident and health policies.


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CLOSED-END LEASE:


A lease arrangement under which you, as the lessee, will have no responsibility to the lessor for the market value of the vehicle at scheduled lease termination, if the vehicle does not have excess kilometres or wear. This type of lease is sometimes called a "walk-away lease". All non-commercial GMAC leases are closed-end leases.


CURRENT MARKET VALUE:


The value of your vehicle at today's market price.


EARLY TERMINATION COSTS:


Fees related to administration, excess kilometres, excess wear and all remaining monthly payments.


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EXCESS KILOMETRES:


Any kilometres exceeding the allowed kilometres as outlined in the lease agreement. Most GMAC Lease agreements allow you to drive 24,000 kilometres per year. If you think you are going to drive more than the standard 24,000 kilometres per year average, you can arrange to include the cost of additional kilometres in your monthly payment. For details, contact us or call 1 800 616-4622.


EXCESS KILOMETRE CHARGE:


A charge per kilometre that is assessed for kilometres driven in excess of what is stipulated in the lease agreement.


EXCESS WEAR:


Excess wear is evaluated at lease end. Broken or missing parts on the inside and out, poor quality repairs, mechanical and electrical damage, and alterations to the car's appearance all constitute abnormal or excess wear. Be sure to talk about this with your dealer when you lease. Please know that normal wear is acceptable. It includes such minor items as small door dings and scratches that don't penetrate the paint finish.


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OPTION TO PURCHASE PRICE:


This is the amount you can pay to purchase your vehicle at the end of your lease. This amount is established up-front when you sign your lease agreement.


GAP PROTECTION:


GAP protection is included on all GMAC lease agreements. It ensures that if your vehicle is stolen and not recovered or destroyed in an accident and there is an insurance settlement, you are not responsible for any additional charges other than your insurance deductible, providing that you have fulfilled all of the contractual agreements of your lease prior to the accident or theft.


LEASE:


An agreement under which the vehicle owner (the lessor) permits its use by a customer (the lessee) for an agreed upon period of time (the term).


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LEASE RATE:


The interest rate used to compute your monthly lease payment.


LEASE TERMINATION REPORT:


Official notification that you are returning your vehicle.


LESSEE:


You, the user of the leased vehicle.


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LESSOR:


The owner of the leased vehicle. The original owner is always your dealer. With most GMAC Lease agreements the lease is assigned by your dealer to GMAC Leaseco Corporation, which then becomes the Lessor. In some cases, the owner of the vehicle remains the selling dealership.


LIEN:


Legal claim or charge against property for the satisfaction of a debt.


LOW KILOMETRE GMAC LEASE:


The Low Kilometre GMAC Lease agreement allows 20,000 km/year.


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NORMAL WEAR:


The minor and reasonable wear a vehicle endures during everyday, ordinary operation. Normal wear can include things like small door dings, paint scratches or stone chips.


OPTION-TO-PURCHASE PRICE:


The amount you can pay to purchase your vehicle at the end of your lease (established when you sign your lease agreement).


PROVINCIAL PERSONAL PROPERTY SECURITY LAW:


Every province has legislation dealing with personal property security law. The legislation allows lenders to protect their interest in personal property by registering it in a centralized provincial registry.


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PURCHASE FINANCE RATE:


The interest rate used to compute your monthly financing payment.


REGULAR KILOMETRE GMAC LEASE:


The Regular Kilometre GMAC Lease agreement allows 24,000 km/year.


RESIDUAL VALUE:


An estimate of your vehicle's worth at lease-end as set by the lessor for the purpose of calculating your monthly lease payment. Residual values vary by term, usage and for different vehicle makes and models, depending on predicted rates of depreciation. Taxes, costs and expenses incurred if you exercise your option to purchase are extra.


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SECURITY DEPOSIT:


A refundable dollar amount that you pay at the time of lease signing. This amount can be used by the lessor to pay for all or part of your excess kilometres or excess use charges you may have at lease-end.


TERM:


The length of time of a lease agreement.


TRANSFER FEE:


A standard fee GMAC charges for transferring your lease to somebody else.


TRANSFER OF LEASE:


When somebody takes over your lease.


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Purchase Financing Terms

BALANCED EQUITY:


When the amount you owe on your vehicle is almost equal to the vehicle's market value. Trading is no problem in this situation.


CANADIAN BLACK BOOK®:


Canada's #1 trusted source for current and accurate trade-in values for over 40 years.


CERTIFIED FUNDS:


Cashier's cheque, bank draft, certified cheque or money order.


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CURRENT MARKET VALUE:


The value of your vehicle at today's market price.


EARLY TERMINATION COSTS:


Fees related to administration, excess kilometres, excess wear and all remaining monthly payments.


EQUITY:


The difference between your vehicle's market value and your loan's outstanding balance.


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GAP PROTECTION:


It ensures that if your vehicle is stolen and not recovered or destroyed in an accident and there is an insurance settlement, you are not responsible for any additional charges other than your insurance deductible, providing that you have fulfilled all of the contractual agreements of your loan prior to the accident or theft.


LATE CHARGES:


A charge for any late payment (any amount that remains unpaid 10 days after it's due) that is equal to 5% of each unpaid amount.


LIEN:


Legal claim or charge against property for the satisfaction of a debt.


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LUMP SUM PAYMENTS:


Any amount greater than your monthly payment.


NEGATIVE EQUITY:


When the amount you owe on a vehicle is more than the vehicle's market value. Trading is made relatively difficult, but not impossible, when a buyer is in this position.


PROVINCIAL PERSONAL PROPERTY SECURITY LAW:


Every province has legislation dealing with personal property security law. The legislation allows lenders to protect their interest in personal property by registering it in a centralized provincial registry


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POSITIVE EQUITY:


When the amount you still owe on your vehicle is less than the vehicle's market value. Trading is strongly recommended in this situation.


PRE-PAYMENT PENALTY:


A fee charged by lenders for paying off all or part of your loan balance early.


PURCHASE FINANCING RATE:


The interest rate used to compute your monthly payment.


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ROUGH GUIDES:


A source of approximate used car values.


TERM:


The length of time of a loan agreement.


"TRADE IN" VALUE:


The value you would expect a dealer to offer if you were planning to trade in your vehicle and apply it (the value) toward the purchase of a newer model.


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TRANSFER FEE:


A standard fee GMAC charges for transferring your loan and equity to somebody else.


TRANSFER OF EQUITY:


When somebody takes over your loan and vehicle ownership (i.e. Equity).


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