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We've collected many of the terms you'll see in Honda Financial ServicesSM documents and provided definitions here.
Please note: The following finance terms and their definitions only apply to financing in the United States, and may not be applicable elsewhere.
The annual percentage rate is a measure of the cost of credit, expressed as a yearly rate.
- Business Day
For financial transactions, business days are typically Monday through Friday, with the exception of non-banking days as specified by the U.S. Federal Reserve. For a complete listing, please visit the Federal Reserve web site.
- Capitalized Cost Reduction
An initial cash payment on a lease of up to 20%, similar to a down payment. The more you pay at the start of the lease, the lower the monthly payments. This could be in the form of cash, the value of a trade, or a combination of the two.
- Down payment
An initial payment when purchasing a vehicle. This payment is negotiable with your dealer.
This is the decline in value of a vehicle over the term of a financing contract or lease.
- Early termination penalties
Most leases allow customers to return the vehicle before the end-of-the-lease term. Often, there are additional fees charged to the customer if this option is exercised. You should be fully aware of what will be required should you decide to end your lease prematurely. With a lease from Honda Financial Services, there are no hidden early termination penalties. Make sure to check your lease agreement thoroughly.
The value of your vehicle, minus the total amount owed on it.
A free, automatic e-mail notification service that sends you an e-mail when your monthly eStatement and correspondence are available on our web site.
- Electronic Statements (eStatements)
eStatements are a convenient way to view your 12 most recent statements on-line.
- GAP (Guaranteed Asset Protection)
Although you may intend to keep a vehicle for the full term of a lease, an accident or theft could cause early termination. Most auto insurance policies pay the average market value of the vehicle, which may be considerably less than the remaining lease obligation. Leases from Honda Financial Services include GAP protection to cover this difference in the event of such a loss.
Vehicles financed with a retail installment contract from Honda Financial Services do not include GAP coverage, except in the state of New York. Customers financing vehicles outside New York state may be able to purchase GAP coverage from their dealer.
- Pay Online
A free service that allows Honda customers to make a single, nonrecurring payment online through a checking or savings account.
Honda Financial Services has a free, automatic electronic payment program. EasyPaySM automatically transfers funds from your checking or savings account each month to make your monthly payment.
- Western Union SpeedPay®
This service allows you to make a one-time payment by telephone. You must call each time you wish to authorize a payment, and there is a small transaction fee for each payment processed through Western Union.
A convenient way to make a same day cash payment at any one of MoneyGram's locations. There is a small transaction fee for each MoneyGram payment.
- Pay by Mail
Simply return the payment coupon from your monthly statement along with your check or money order.
- Purchase price
The selling price of the vehicle plus any additional charges such as taxes, acquisition fees, official fees, and other charges.
- Residual value
The projected value of a vehicle at the end of a lease. This value is not negotiable. This value will vary according to the lease terms, mileage allowance and the vehicle's make and model. Vehicles that tend to have a high resale value will also have higher residual values, which typically lead to lower lease payments.
The duration of a lease or financing contract, usually expressed in months (e.g., 36 months).
- Turn-in Fee
Fee charged for lease after the vehicle is returned to the dealership. Fee may be waived for loyal customers. The turn-in fee amount depends on your state.
- Loyalty Requirement
A loyal lease customer is one who purchases or leases another new Honda or Acura automobile within 30 days prior to or after the turn-in date.