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Your Location: Home - Auto Loan Auto Loan Information CenterCar and Auto Terminology Dictionary
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Inception of a lease
The date of signing of the lease agreement where the property to be leased has been constructed or has been been acquired by the lessor. Where, on such date, the property to be leased has not been constructed or acquired by the lessor, the date on which such construction is completed or the property is acquired by the lessor, shall be the date of inception.
IRR(Internal Rate of Return)
The internal rate of return of a project is the discount rate which makes makes its net present value equal to zero.
The IRR method is a popular discounted cash flow method, that takes into account the time value of money and also considers the cash flow stream in its entirety.
Late Payment Charges
When the monthly installment towards repayment of a loan is delayed the financier collects the installment alongwith the late payment charges. The late payment charge is also known as the delayed payment charges or the overdue payment charges.
The late payment charges are fixed at the time of signing the finance contract.
Lease Rental
In a purchase transaction, the commodity (as a tangible form) is purchased for money while in a hiring transaction the services of the commodity (intangible) are purchased. Economic parlance therefore refers to the payment on hire interchangably as 'rent', 'rental' or 'lease payment'.
Lease Rate
The equivalent simple annual interest rate implicit in the minimum lease rentals. This is not the same as the interest rate implicit in a lease, which reflects the compounding effect.
Lessee
The user of the leased asset is called the lessee. The lessor (finance company) is teh owner of the asset.
Under the Motor Vehicles Act of 1930, the lessor was considered as the owner of the vehicle and was subject to the liabilities of owner under the act. Thus the lessor was liable for any criminal action or other offence, even though the lease agreement shifted this burden to the lessee.
This position has been reversed under the Motor Vehicles Act, 1988. Although the legal ownership vests in the lessor, the lessee is regarded as the owner for all purposes under the Act.
Lessor
Under the lease agreement, the finance company who is the legal owner of the asset is known as the lessor.
The Motor Vehicles Act, 1988 - Section 51 contains special provisions regarding motor vehicle subject to hire-purchase agreement, etc. In case of vehicles financed under hire-purchase, lease or loan agreement, the name of the lessor is mentioned as a financier.
LIEN
A lender's claim on assets offered as security for a loan. It is a right which a person, to whom a sum of money is owed by another, is given in law over the goods of that other', to secure payment of the sum owed.
Lien may be possessory, i.e., exercisable only as long as the goods are in the possession of the claimant, and equitable, i.e., enforcable irrespective of the possession by the creditor.
LITER
The measurement of engine displacement used in combustion. In other words, the total engine volume used to produce power.
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