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Your Location: Home - Auto Loan Auto Loan Information CenterCar and Auto Terminology Dictionary
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Security Deposit
Security Deposit is typical to hire-purchase agreements offered by Non Banking Finance Companies.
The party seeking finance (hirer), is offered finance upto 100% of the cars cost. The security deposit can vary from 15% to 35% as per the scheme selected. The security deposit earns an interest of 14% simple or 14% compounded quarterly, for the period of the agreement (tenure).
At the end of the tenure the security deposit is refunded along with the interest earned through the tenure.
Unlike Fixed Deposits which can be terminated and refund sought before maturity, the security deposit is linked to the car hire-purchase agreement and is refunded only on termination of the hire-purchase agreement and not in between.
Termination Schedule
Leases sometimes contain provisions permitting a lessee to terminate the lease during the lease term in the event the leased equipment becomes redundant or obsolete to needs. The liability of the lessee in the event of such termination is set forth in a termination schedule which values the equipment at various points during the lease term. If the equipment is sold at a price lower than set forth in the schedule, the lessee pays the difference.
Torque
A turning or twisting force that produces rotation, expressed in pound-feet. Torque affects the vehicle's performance when accelerating, carrying heavy loads or towing a trailer car. The measurement of a vehicle's torque determines whether that vehicle accelerates well at low speeds or at high speeds.
Traction Control
Traction refers to the vehicle's grip on the road. With the proper traction, tires transfer the vehicle's power to the road, allowing the driver to experience the full benefit of the engine.
Warranty
Basic Warranty: This warranty is commonly known as the "bumper-to-bumper" coverage. Within this warranty period if any component on the car breaks or fails, it's replaced free of charge. This does not include engines, transmissions, brake pads, tires and driveshaft.
Powertrain Warranty: This warranty covers any problems that might arise with the engine, transmission, and driveshaft.
Passive-Restraint Warranty: This warranty requires that all manufactures cover seatbelts and airbags for 5 years/50,000 miles.
Exhaust-Emission Warranty: If any emission-system components malfunctions than your guaranteed for 8 years/80,000 miles.
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