The Simply Drive Glossary
Speak Your Lender’s Language.
Understand every word in your offer before you sign it, so nothing in your contract catches you off guard.
A
- APR
- Annual percentage rate. The yearly cost of borrowing, including interest and some fees. It's the fairest number to compare offers.
C
- Certificate of Full Performance
- The document your trustee gives you when you finish a consumer proposal. Lenders often ask to see it.
- Co-signer
- Someone who signs the loan with you and agrees to pay if you can't.
- Consumer proposal
- A legal agreement, filed through a Licensed Insolvency Trustee, to repay creditors part of what you owe.
- Credit bureau
- A company that keeps your credit report. In Canada, the two main ones are Equifax and TransUnion.
D
- Deficiency balance
- What's still owed after a repossessed car is sold for less than the loan balance.
- Discharge
- When a bankruptcy formally ends and most of the debts in it are released.
- Down payment
- Money you pay upfront. It lowers how much you borrow, and usually your payment.
- Depreciation
- How much value a car loses over time. New cars lose the most in their first few years.
E
- Extended warranty
- Coverage you can buy beyond the manufacturer's warranty. What it covers, and for how long, varies a lot.
H
- Hard inquiry
- A lender checking your credit when you apply. It can lower your score slightly for a while.
I
- Interest rate
- The percentage a lender charges on what you borrow, not including fees.
L
- Licensed Insolvency Trustee
- A federally licensed professional who sets up and manages consumer proposals and bankruptcies.
M
- MSRP
- Manufacturer's suggested retail price. The starting price the maker recommends, before fees, taxes and add-ons.
N
- Negative equity
- Owing more on your current car than it's worth.
O
- OAC
- On approved credit. Any rate or payment shown is an example until a lender approves your application.
R
- R7 rating
- A credit report code meaning a debt is being repaid through a consumer proposal or debt management plan.
S
- Secured loan
- A loan backed by something you own. With a car loan, that's the car, which the lender can repossess if payments stop.
- Safety Standards Certificate
- An Ontario inspection certificate showing a used vehicle meets basic safety standards. It's needed to put plates on most used cars.
T
- Term
- How long you have to repay the loan, usually in months. Longer terms lower the payment but cost more in interest.
- Trade-in value
- What a dealer will credit you for your current car toward the next one. It's usually less than a private sale.
V
- Vehicle history report
- A report on a used car's past: accidents, liens, registrations and odometer readings.
The more I drive, the more it confirms how you were able to pick the right car for me!
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