Browse through this section to learn what the different finance buzzwords mean, or simply click on any highlighted term throughout the finance section to jump right to its definition.

Acquisition Fee

Processing fee charged by MMCA to acquire the lease from the dealer. This $495 fee is paid when the lease is signed; it may be included in the capitalized cost or paid up front.

Adjusted Capitalized Cost

The price of the leased vehicle and other amounts which are capitalized in the lease, including tax, title, license, ancillary products, acquisition fee, and optional equipment, net of other amounts such as cash, rebate, and /or net trade in value (see Capitalized Cost Reduction).

Annual Percentage Rate (APR)

The cost of your credit as a yearly rate.

Capitalized Cost Reduction

Cash, rebate, and/or net trade-in value of a vehicle which is applied to a lease at inception in order to reduce the Gross Capitalized Cost. The Capitalized Cost Reduction is similar to a down payment on a retail installment sale contract.

Down Payment

An amount subtracted from the cash price to arrive at a net cash price. The amount may be cash, a mutually agreed value for a vehicle trade-in, a manufacturer's rebate, or a combination of all.

Excess Mileage Charge

Fee assessed lessee or purchaser for every mile driven above the maximum mileage allowance stated in the lease agreement or retail installment sale contract. This fee is charged only if the leased vehicle is not purchased at end of term or if a vehicle financed under the Diamond Advantage Plan is sold back to MMCA at contract maturity.

Excess Wear

Damage to the vehicle that goes beyond what is considered normal. Some examples include broken glass; broken headlight or tail light lenses; a stained, damaged, or torn interior; missing parts such as chrome, wheel rims, or broken antennas; damage to the body; mismatched or worn tires; or any physical problems that impede the vehicle's performance.

Final Payment (Diamond Advantage Plan)

The last installment on a Diamond Advantage Plan contract which is substantially larger than each of the other scheduled installments. This amount can be paid off or refinanced if the consumer chooses to keep the vehicle.

Gap Protection

Protection provided by MMCA at no additional cost, which reduces liability for the difference between the proceeds received from the insurance company and the early termination liability on a lease [or the contract balance on a Diamond Advantage Plan contract] in the event the vehicle is totaled or stolen. Gap protection is provided on all Diamond Lease Plan and Diamond Advantage Plan contracts.

Gross Capitalized Cost

The price of a leased vehicle and other amounts which are capitalized in the lease, including optional equipment, license, title and registration fees, and taxes.

Lessee

The user of the vehicle under a lease agreement.

Low Mileage Option

A Low mileage option of 12,000 miles per year is available with the Diamond Lease Plan and Diamond Advantage Plan. When this option is chosen, the monthly payment will be lower because the vehicle should have fewer miles on it at the end of the term, resulting in a higher resale value. Use this option only if you are sure of the number of miles you drive per year.

Mileage Allowance

Stated in contract as the number of miles the vehicle may be driven over the duration of the contract term. Mileage in excess of this amount will be subject to a per-mile charge.

Monthly Sales/Use Tax

A tariff assessed on each regular lease payment. Rates vary by state, county and city.

Multiple Security Deposit Option

MMCA option that allows the lessee to enjoy reduced rent charges and a lower monthly payment when more than one security deposit is paid up-front.

Net Trade-in Allowance

The agreed-on value of a vehicle being transferred by the customer to the dealer in conjunction with the lease or purchase of a new vehicle, less the outstanding balance owed.

Option to Refinance

Option at maturity of Diamond Advantage Plan contract for a customer to enter into a new written agreement with MMCA to refinance the final payment (subject to certain conditions).

Planned Excess Mileage

When a lessee or buyer anticipates driving more than 15,000 miles per year, he or she may build the charge for excess mileage into the monthly payment at contract inception for a charge that is less than the one assessed at the end of the contract.

Property/Excise Tax

A tariff assessed by some states based upon the value of the vehicle. Rates vary by taxing jurisdiction.

Purchase Option

Allows the lessee to purchase the vehicle upon termination of the lease agreement at a price established at inception of the lease.

Residual Value

The value of the vehicle at the end of the lease used in calculating the monthly payment.

Sales Price

An amount which includes the cost of the vehicle, plus accessories, services, and taxes.

Security Deposit

An amount collected at the inception of a lease to cover obligations that the lessee should pay, but does not. Examples of these are excess mileage or wear charges, and unbilled personal property tax. If no additional obligations are due, the security deposit is refunded at the end of the lease.

Standard Mileage

MMCA allows 15,000 miles per year on average for both Diamond Lease Plan and Diamond Advantage Plan contracts.

Up-front Sales/Use Tax

A tariff assessed on leased vehicles at inception. Rates vary by state, county and city.