Glossary of Auto Loan Terms
(O)
Obligation
With regard to purchasing a car, an obligation is a requirement to
repay the debt in full, meeting predetermined payment dates and all
other terms of the loan.
Open-End Credit
Open end credit is a credit account with no pre-determined limits.
While it’s a positive point when buying a big-dollar item, consumers
must remember that the amount spent must be repaid - with interest.
Open-End Lease
An open end lease is one that has no deadline for returning the car
to the dealership. The negative of an open-end lease is that the car
may be almost worthless by the time it’s returned, leaving the
driver with a larger bill than was expected. The positive side is
that the person leasing the car has the opportunity to decide when
the car should be returned.
Options
Options refers to any “extras” you want to include on the car. The
opposite of option features is standard features. For example, most
cars today come standard with an air conditioner and radio. The
buyer may add options such as remote control start, keyless entry or
a more elaborate CD player, but remember that these options will
typically drive up the cost of the vehicle.
Origination Fee
One of the fees associated with taking out a loan is an origination
fee. Lenders typically call this money sufficient for creating the
paperwork and starting the loan process.
Other Owner
A person other than the current owner listed on the title of a car.
The “other owner” may have co-signed for the loan. |
