Personal Finance Chapter 13

Car Purchasing Terms and Definitions

• Gap Insurance: Covers the difference between the amount owed on a car loan and the car's actual cash value if the vehicle is stolen or totaled.
• Option: A specific characteristic or feature of a car that enhances safety, performance, or fuel efficiency.
• Manufacturer’s Suggested Retail Price (MSRP): The price recommended by the vehicle manufacturer, often displayed on the vehicle's window.
• Buyer's Guide Sticker: A label found on used cars that outlines warranty coverage details or indicates the absence of a warranty.
• Certified Used Car: A vehicle that has undergone thorough mechanical and physical inspections by a dealer and meets certain quality standards.
• Truth in Lending Act: U.S. law mandating that lenders provide clear and complete information about credit terms and costs to borrowers.
• Vehicle Identification Number (VIN): A unique code assigned to each vehicle for identification purposes, crucial for registration and insurance.
• Depreciation: The reduction in a vehicle's market value over time due to wear, age, and usage.
• Auto Superstore: A dealership offering a wide range of both new and used vehicles that have been inspected, serviced, and come with warranties.
• Lemon: A car with significant mechanical issues that the manufacturer fails to repair after several attempts within a reasonable time frame.
• FTC Used-Car Rule: Regulations requiring dealers to disclose the specifics of what is covered and not covered by a used car's warranty.
• Sticker Price: The displayed selling price of a vehicle, often used as a starting point for negotiations.
• Kelly Blue Book and Edmunds: Publications providing estimates of resale values for new and used cars, essential for pricing and valuation.
• Car Warranty: A written guarantee from the dealer promising to cover repairs for a specified period if issues arise with the vehicle.
• Lemon Law: Legislation that mandates manufacturers or sellers of defective vehicles to replace, repair, or refund the purchase price to the buyer.
• As-Is (No Warranty): Indicates that the buyer assumes all responsibility for any flaws and repairs after the sale of the vehicle.
• Warranty: A checked box signifies that the dealer will cover repair costs for the vehicle for a defined period.
• Fixed Expenses: Regular, predictable costs included in a monthly budget, crucial for maintaining financial stability when purchasing a vehicle.

Explore essential terms related to purchasing a car in this flashcard quiz. Learn about important concepts like gap insurance, options, and MSRP. This quiz is designed to help you understand the financial aspects of buying a vehicle.