Glossary
The terms you'll meet in vehicle history reports, on titles and in finance offices, explained in plain English. More in our blog.
A
- Acquisition fee
- A charge from the leasing company for setting up a lease, usually rolled into the payments.
- Amount financed
- The total you borrow on a car loan after your down payment and trade-in are subtracted.
- APR
- Annual percentage rate. The yearly cost of a loan, including interest and most lender fees.
- As-is sale
- A sale with no warranty from the seller. Any problems found after the sale are the buyer's to fix.
B
- Branded title
- A title a state has permanently marked to record a serious event such as salvage, flood or rebuild.
C
- Capitalized cost
- The negotiated price of a car in a lease. Lower it and the monthly payment falls.
- Certified pre-owned (CPO)
- A used car inspected and backed by an extended warranty from the manufacturer or dealer.
- Check digit
- The ninth character of a VIN, calculated from the others, used to spot mistyped or fake VINs.
- Clean title
- A title with no brands recorded on it. It doesn't by itself mean the car was never damaged.
- Curbstoning
- Unlicensed dealers posing as private sellers to offload cars, often with hidden problems.
D
- Depreciation
- The value a car loses over time through age, mileage and wear.
- Down payment
- Money paid up front when you buy or lease, reducing the amount you borrow.
F
- Fair market value
- What a vehicle typically sells for between a willing buyer and seller, given its condition and mileage.
- Flood title
- A title brand applied when a vehicle has been damaged by water.
G
- Gap insurance
- Covers the difference between what you owe and what the car is worth if it's totaled or stolen.
- Gray market vehicle
- A car built for another country and imported outside the manufacturer's official channels.
J
- Junk title
- A brand for a vehicle fit only for parts or scrap. It usually can't be registered for the road again.
L
- Lemon law
- State laws that require a manufacturer to replace or buy back a new car with defects it can't fix.
- Lien
- A lender's legal claim on a car until the loan is paid off. The title can't transfer cleanly until it's released.
M
- Model year
- The year a manufacturer assigns to a vehicle design, which can differ from the year it was built.
- Money factor
- A lease's finance rate in decimal form. Multiply by 2,400 to compare it with an APR.
- MSRP
- Manufacturer's suggested retail price, the sticker price on a new car.
N
- NHTSA
- The National Highway Traffic Safety Administration, the federal agency for vehicle safety, recalls and crash tests.
- NMVTIS
- The National Motor Vehicle Title Information System, a federal database of title, brand and total-loss records.
O
- Odometer rollback
- Illegally winding back a vehicle's mileage reading to make it look less used.
P
- Pre-purchase inspection
- An independent mechanic's check of a used car before you buy it.
R
- Rebuilt title
- A brand for a salvage vehicle that was repaired and passed a state inspection.
- Recall
- A manufacturer's campaign to fix a safety defect for free.
- Residual value
- A leased car's expected value at the end of the lease, set as a percentage of MSRP.
S
- Salvage title
- A brand for a vehicle declared a loss, usually because repairs would cost more than it's worth.
T
- Title washing
- Moving a branded vehicle through another state to obtain a title without the brand.
- Total loss
- When an insurer decides a damaged vehicle isn't worth repairing and pays out its value instead.
- Trade-in value
- What a dealer offers for your current car as credit toward the next one.
U
- Upside down
- Owing more on a car loan than the car is worth. Also called negative equity.
V
- Vehicle history report
- A summary of a vehicle's records by VIN: title brands, odometer readings, salvage, recalls and more.
- VIN
- Vehicle Identification Number. The unique 17-character code assigned to every car built since 1981.
- VIN decoder
- A tool that translates a VIN into the factory details coded into it.
W
- Warranty
- The manufacturer's or seller's promise to repair certain problems for a set time or mileage.