Acquisition Fee – A fee charged by the lender and usually ranges anywhere from $250 to $800. May be amortized in the monthly payment or required upfront at inception.

A/H – (Disability Insurance – Accident and Health) Pays benefits for each day unable to work due to doctor certified disability.

APR Lease – Some lenders structure leases in terms of APR such as 4.9% APR as opposed to a money factor lease such as .0025. In Menu Pro, we need to make sure we specify "APR Lease" if the lease an APR lease.

Back-end Gross – Gross profit made by the Finance Department. This would include profit on any products sold in addition to finance reserve profit.

Base Residual - On a lease, the base residual is the amount that the vehicle is determined to be worth at the end of the lease term. This could be expressed as a percentage of MSRP or as a dollar amount. This is also known as LEV or Lease End Value.

Billed – When the Lender that is providing the loan to the customer has been forwarded the contract so that the dealership can be paid or "fund the loan".

Cap Reduction – A fancy name for cash down. It’s anything that reduces the capitalized cost before the monthly payment is calculated. It includes cash down, trade-in credit, manufacturer’s rebate, etc. Usually they try not to give you the factory rebate if you lease. As far as the factory is concerned, the dealer still sold the car and still qualified for the rebate. In other words, a cap reduction payment reduces the price at which the car is sold and thereby reduces the monthly payment.

Captive Lender – A captive lender is normally referred to as the "Factory" or "Manufacturer’s" lending division such as Ford Motor Credit Company (FMCC) or General Motors Acceptance Corporation (GMAC).

CL – (Credit Life Insurance) Pays off the balance of loan in the event of death.

Depreciation Fee – This is a fee that is typically the main component in the monthly lease payment. The depreciation of a vehicle for the lease term is decided by finding the vehicle's residual value at lease termination.

Finance Reserve – This is the gross profit made by the dealership when financing of the vehicle is arranged and facilitated through the dealership’s Finance Department.

Front-end Gross – Gross profit made on the sale of the vehicle and by the sales department. This would normally be the amount made on the sale of the car plus holdback amount and any incentive the manufacturer may have.

Funded – When the lender has transferred the funds to pay the dealership for the vehicle.

GAP - Usually referred to as "Guaranteed Auto Protection". Gap covers the difference between the loan payoff and the Insurance settlement if the vehicle is declared a total loss due to an accident or theft.

GP – (Gross Profit) Total revenue of the business minus the cost of goods it sold. Gross profit does not include income form incidental sources and also excludes selling and administrative expenses. Simply selling price minus cost of goods sold.

Gross Cap Cost – Fees, products, taxes, and any cap costs that are added to the selling price.

Hold Back – This is profit the vehicle manufacturer does not reflect in the invoice price of the vehicle. It is usually somewhere between 2% and 4% of the invoice price and is paid to the dealer after they sell the vehicle.

Incentive – Any money the manufacturer pays the dealer above and beyond the normal pricing plan. This may or may not be an incentive amount that is public knowledge.

Lien Holder (Lienholder; Lien-Holder) – In different parts of the country, lien holder and lender are used interchangeably. A lien holder is the same thing as a lender.

Lump Sum Tax – This is the total tax amount on the purchase of the vehicle that is rolled into the total financed amount and is included in the monthly payment. On Retail and Balloon deals you will have a lump sum tax. On a lease where tax is calculated on monthly payment you have a monthly lease tax as opposed to a lump sum tax.

MSRP – Manufacturer’s Suggested Retail Price, or "Sticker Price".

Money Factor – An alternate method of interest changed on a lease or the finance charge you pay on an automobile lease. Unlike interest rates, which are expressed as a percentage of the amount borrowed, the money factor is usually stated as a decimal. Example: You can calculate the actual interest rate you're paying by multiplying the decimal by 24. So, for example, if you're quoted a money factor of 0.00297, the rate you're paying is 7.13% (0.00297 x 24 = 0.07128).

Net Cap Cost – This is the "capitalized cost" (selling price), less deductions to reduce the price of the car, like down payment, trade-in credit, and rebates. Net cap cost is used to calculate your base monthly payment. Think of it as "amount financed". Also referred to as Adjusted Capitalized Cost.

Non-Captive Lender – A non-captive lender would be a bank, credit union, or other lending organization that has a business relationship with the dealership to provide financing for the dealership’s customer. In this case the dealership usually receives a flat fee for each loan processed by the lender.

Pack – This is a dollar amount usually deducted from the gross profit amount in the dealer’s DMS system and used to pay for overhead and operating expenses. Normally pack will be applied evenly to all vehicles regardless of selling price. Commissions, etc. are most often calculated after pack has been subtracted. Common pack amounts range from $200 - $500.

Penetrations – The percent of products sold based on the number of units delivered, i.e. number of VSC Sold / Unit Delivered.

Power Rating – The sum of all product penetrations. Power Rating does not include Finance Reserve Penetration.

PVR (Per Vehicle Retailed) - Term used to express the amount of profit made by the dealership on average for each vehicle sold. I.e. If the dealership sold a 100 vehicles and made a profit of $35,000, the PVR would be $350. ($35,000 / 100 vehicles sold = $350 profit per vehicle)

Spread – The difference between the Buy Rate and Sell Rate on the money that is being loaned to the customer. For example, the dealer may ‘buy’ the money at 2.9% APR and contract the customer at 4.9% APR, thereby making 2%.

Super Gross – The sum of Front-end and Back-end Gross.

Revenue – The entire amount of income before any deductions are made. Revenue could be synonymous with Gross Receipts or Total Sales.

Term – The length of the loan expressed in months.

Tier – Ranking system used to establish the interest rate the customer will be paying. Based on Credit Report scores and credit history, lenders use Tier to express the creditworthiness of the customer. Usually tier will be expressed as A, B, C, or D. In Pro Tracking, we use 1, 2, 3, etc.

Turn – Also referred to as Turn Over (TO). In Pro Tracking, the term is used to designate if the Finance Manager had an opportunity to sell to the customer. If there is no opportunity to sell product or finance the vehicle, such as on a Fleet deal then it would be referred to as No-Turn.

VSC – Vehicle Service Contract.


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