The Blue Book or Kelley Blue Book lists new and used car prices, helping car buyers determine the fair market value and trade-in value of automobiles.

The Blue Book or Kelley Blue Book is a guidebook that compiles and quotes prices for new and used automobiles and other vehicles of all makes, models, and types. Over the decades, Blue Book pricing guides have been published for a variety of markets—including guides for motorcycles, travel trailers, campers, ATVs, snowmobiles, and manufactured housing.
Blue Books show buyers and sellers of automobiles what prices others have paid—the so-called fair purchase price—to acquire vehicles of the same make, model, year, and comparable mileage and use. The Blue Book or Kelley Blue Book is a guidebook that compiles and quotes prices for new and used automobiles and other vehicles of all makes, models, and types. The Blue Book analyzes the private party value, trade-in value, suggested retail value, and certified pre-owned (CPO) value for used cars. The Blue Book analyzes the private party value, trade-in value, suggested retail value, and certified pre-owned (CPO) value for used cars.

Blue Book

A closed-end lease is a type of rental agreement that does not require the lessee to purchase the asset at the end of the lease.

A closed-end lease is a rental agreement that puts no obligation on the lessee (the person making periodic lease payments) to purchase the leased asset at the end of the agreement. A closed-end lease is a rental agreement that puts no obligation on the lessee (the person making periodic lease payments) to purchase the leased asset at the end of the agreement. In an open-end lease, suppose your lease payments are based on the assumption that the $20,000 new car that you are leasing will be worth only $10,000 at the end of your lease agreement. Since the lessee has no obligation to purchase the leased asset upon lease expiration and does not have to worry about whether the asset will depreciate more than expected throughout the course of the lease, it is argued that closed-end leases are better for the average person. The lease terms in a closed-end lease are more restrictive but the lessee does not assume the depreciation risk of the asset when the lease is over.

Closed-End Lease

A clunker is a popular reference to the old vehicle traded in under the U.S. government's "cash-for-clunkers" program, rolled out in 2009.

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A clunker is a popular term for an old vehicle that was coined in the 1930s. They argue that the program failed due to hidden effects and unseen consequences of the program and that the program created a shortage of used vehicles, causing used car prices to surge and harming low-income people. They also argue that the program cost taxpayers $3 billion and that the program did little to stimulate the U.S. economy—even in the short run—because it helped foreign auto manufacturers at the expense of domestic manufacturers.
A 2017 study used data from sales in Texas to evaluate the program. The study also found that the program induced customers to purchase cheaper fuel-efficient vehicles to meet its criteria, thereby distorting the market for fuel-efficient vehicles. Supporters of the program argued that it was a success because it provided a stimulus to the economy and replaced many fuel inefficient vehicles with more fuel-efficient vehicles that created less pollution.

Clunker

Dealer financing refers to loans originated by a retailer that are sold to a bank or other third-party institutions.

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What is Dealer Financing
Understanding Dealer Financing The so-called buy rate is the interest rate that the financial institution quotes to the dealer for the financing. A well-known example of dealer financing is auto dealers that offer car purchase financing. A well-known example of dealer financing is auto dealers that offer car purchase financing. The dealer might own the actual loan rather than transfer it to other parties.
By offering loans at the dealership, an auto retailer may be able to secure the sale of a vehicle more readily than waiting for potential buyers to arrange financing on their own.

Dealer Financing

With an indirect loan, the issuer or holder of the debt doesn't have a direct relationship with the borrower. Instead, a third party issues the loan, with the help of an intermediary.

An indirect loan can refer to an installment loan in which the lender – either the original issuer of the debt or the current holder of the debt – does not have a direct relationship with the borrower. Read any indirect loan contract very carefully: If the dealer cannot sell the loan the buyer signed to a lender, it may have the right to cancel the contract within a specified period of time and require the buyer to return the car. Auto dealerships are one of the most common businesses involved with indirect loans; in fact, some authorities even call indirect loans a type of car loan. An indirect loan can refer to an installment loan in which the lender – either the original issuer of the debt or the current holder of the debt – does not have a direct relationship with the borrower. Indirect loans are typically more expensive than direct loans, as they are often used by borrowers who might not otherwise qualify for a loan.

Indirect Loan

A lease balance is the outstanding sum that a borrower owes on a lease.

Lease balance is the amount of money that a customer owes under the terms of a vehicle lease contract. If the lessee wants to trade in a leased vehicle to a dealer or a leasing company and the proceeds from the transaction exceed the lease balance on the vehicle, they could use the excess funds towards the purchase or lease of another vehicle. Lease balance is the amount of money that a customer owes under the terms of a vehicle lease contract if the vehicle is damaged or the lessee decides to terminate the lease early for some reason. When a lease agreement is terminated for any reason, the lease's early termination payoff provision is used to calculate the lease balance and determine how much the lessee must pay to end the agreement. If the lessee seeks an early termination of their lease and resells the vehicle, they could use those proceeds to cover the lease balance plus any additional fees due at the termination.

Lease Balance

Net advantage to leasing (NAL) refers to the total monetary savings that would result from a person or a business choosing to lease an asset, as opposed to purchasing it outright.

Net advantage to leasing (NAL) refers to the total monetary savings that would potentially result from a person or a business choosing to lease an asset as opposed to purchasing it outright. The benefits of leasing are usually determined by comparing the net present value of purchasing the asset outright to the net present value of leasing it. With a net present value calculation, buyers can calculate the net present value of their investment over the full lifecycle and compare the average annual cost. However, even if the net present value calculations of a lease appear favorable to a purchase, certain rights that come with ownership–such as the right to alter or re-sell an item–are not present with leased items (because leased items are still owned by the lessor). From the leasing perspective, net present value calculations will include the contracted monthly payment and the leasing timeframe, which typically ranges from one to three years.

Net Advantage to Leasing (NAL)

Special financing is a lending option in the auto sales industry that can be offered to borrowers who have issues with their credit history.

Special financing is a segment of the auto lending industry for borrowers with a limited or tainted credit history. Before car buyers agree to a special financing loan, they should make certain that they aren't eligible for a regular car loan with more favorable terms. Special financing in the auto finance industry is risk based, which means that the terms of the loan are set so that the expected returns to the lender/investor are great enough to cover the risk of default by the borrower. As with other forms of subprime lending, such as for home mortgages, consumer advocates caution that borrowers may not be fully aware of the higher costs associated with special financing and that they may not be able to afford their payments for the full term of the loan. Special financing loans are offered to car buyers whose credit history would make them ineligible for a regular loan.

Special Financing

A subprime auto loan is a type of loan used to finance a car purchase that’s offered to people with low credit scores or limited credit histories.

A subprime auto loan is a type of loan used to finance a car purchase that’s offered to people with low credit scores or limited credit histories. Fees can vary on subprime auto loans; shop around if you need to resort to one.
There is no official cutoff score for subprime (versus prime) status, but usually the borrower’s credit rating has to fall below a FICO score of 650 and above 450 to be considered subprime. A subprime auto loan is a type of loan used to finance a car purchase that’s offered to people with low credit scores or limited credit histories. As there is no official subprime credit score, so there is no official subprime auto loan rate. While there is no official subprime auto loan rate, it is generally at least triple the prime loan rate and can even be as much as five times higher.

Subprime Auto Loan

A subvented lease is a type of lease in which the entity offering the lease reduces the cost through some type of subsidy. 

A subvented lease is a type of lease in which the entity offering the lease reduces the cost through some subsidy. In a car leasing agreement, the individual leasing the car makes monthly payments based on a value that is associated with the duration of the car's use. The entity offering the lease determines the leasing value by subtracting the expected resale value of the vehicle at the end of the lease by its current value. The car manufacturer could offer a subvented lease on the car by increasing the residual value to $7,500, and this would decrease the monthly payment to $260.42 ($12,500 ÷ 48). The residual value is the estimated value of the vehicle at the end of the lease and is assigned by the leasing agent.

Auto Loans

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