Accessories
Like options, these are features that don't come standard with a certain model, but are installed usually by the dealer. You can sometimes ask the dealer to add an accessory to a vehicle on hand.

Adjusted Capitalized Cost
The difference between the gross capitalized cost reduction. This is the amount used to calculate the lease payment.

Amount Financed
The agreed-upon sale price of a vehicle plus any charges for taxes, title, license fees, service contracts and insurance - less any down payment and/or net trade-in allowance. This is the amount which is subject to finance charges.

Auto Maker Costs, or Manufacturer's Cost
Assembly plants cost millions of dollars to build and operate. A state-of-the-art paint system alone these days can cost well over $250 million. It cost Ford over $6 billion to design, engineer, plan, market, and put into manufacture the Contour/Mystique/Montero world car several years ago. Because of the scale and number of costs, it is extremely difficult to determine how much a car costs the auto makers to build. We do know that in today's market the sport utility and truck market has several entrants that reportedly make the manufacturers over $10,000 per vehicle! Ford's Lincoln Towne Car, Wixom Assembly Plant at one time made the corporation over $1 million a hour in profits.

Capitalized Cost Reduction
The amount of any net trade-in allowance, rebate, noncash credit or cash which you pay that reduces the gross capitalized cost.

Closed-End Lease
A type of lease in which the lessee is not responsible for the value of the vehicle at the end of the lease. The lessee is liable for excess mileage and excessive wear and use. This is also called a guaranteed trade-in, net lease or walk-away lease. This is the only type of lease that Toyota Financial Services (TFS) uses.

Commission, or Sales Cut
The amount of money a salesperson gets for selling a vehicle. Often a salesperson's commission is based on volume of sales -- in other words, the salesperson gets X% for selling 10 units in a month, X Y% for selling 25 units, and X Y Z% for selling 40 vehicles in a month. (See also spiff, switch to spiff, and minimum deal.)

Customer Incentive, Factory to Customer Incentive, or Rebate
This is the one that the car manufacturers are always going on about in television commercials and print ads. They're generally in the $500 to $2000 range, and many come with a choice of either cash or a low financing rate. They're primarily given on slow sellers and often used regionally, where an oversupply condition may exist. Lee Iacocca has been credited with starting them.

Dealer Incentive, Factory to Dealer Incentive, or Manufacturer to Dealer Incentive
Manufacturers build vehicles. Sometimes they miscalculate what the consumer wants, so inventories swell and the plant manager at the factory starts to get nervous. The first rule in the car business is never to stop the assembly line, so instead of stopping the inflow of vehicles, the factory begins to flood the sales regions. If those franchisees want any of the hot sellers, they have to get rid of these dogs, too! Eventually, all the spots available for a dealer to hide his dogs fill up. The bigwigs at corporate catch wind of these games and decide to put a dealer incentive on the vehicles, sometimes in excess of $6,000. The dealers figure that this incentive is theirs and theirs alone, not to be shared with a consumer; they don't even want you to know about it. If you know that a dealer incentive exists, you deserve to claim it as your own. Once again, dealer incentives can be doled out by the region, and are in effect during a specific period of time.

Dealer Invoice Price, Invoice, or Tissue
The price the dealer pays the manufacturer. The manufacturer sets this price and often raises it several times during a model year, attempting to balance profits and volume.

Down Payment
The amount of cash or net trade-in allowance applied to reduce the cash sales price of a vehicle. Most retail transactions require a down payment of 10 to 15 percent of the amount to be financed. However, the required down payment can be less, depending on your credit standing, ability to repay and other criteria. A down payment helps lower your monthly payment, as well as establish equity in your vehicle.

Early Termination
When a lease is ended by the lessee returning the lease vehicle to the lessor before its scheduled maturity date.

Extra Value Package
A package contains several options together for one price. The price of the package is less than the price of purchasing all the options separately. Savings based on Manufacturer's Suggested Retail Price of individual options. Actual dealer price and customer savings may vary.

Incentives
A price reduction given to entice consumers to buy a product, or to stimulate the selling department (dealerships) to push more product onto the public. There are several types of incentives. Remember that they apply on the day of delivery, so buying a vehicle on a factory order may be risky from a pure incentive standpoint.

Initial Contract Term
Range in monthly increments from 24 to 48 months.

Invoice Price
Also known as the Dealer Invoice Price, this is cost to the dealer to acquire the vehicle and have it transported to the lot. The Invoice Price is calculated as the Base Price plus the cost of optional equipment and the cost of shipping the car to the dealer (also known as 'freight' or 'destination & delivery'). Invoice Price is the manufacturer's initial charge to the dealer, which is sometimes higher than the dealer's final cost because dealers often receive rebates, allowances, discounts, and incentive awards from the manufacturer. The Invoice Price does not include any dealer-installed options added after delivery. This price also may change on a given vehicle within the model year.

Lease
A contract between lessor and lessee for a specified time period and a specific payment. The title to the vehicle remains in the name of lessor as owner unless and until the lessee exercises his/her purchase option. Or, in layman's terms: A contract for a specified time period and a specific payment. The title to the car is in the name of the lessor, unless the lessee exercises the purchase option to take ownership of the car.

Lessee
You, the customer, who signs a lease with the lessor, and pays for the use of the vehicle according to the regulations of the lease.

Lessor
The Toyota dealership, and after assignment, the financial institution to which the lease is assigned. The party leasing the vehicle to the lessee, the actual owner of the vehicle and the lease (i.e., leasing company, dealership or financial institution).

Model Grade
A certain model may come in several varieties or levels of "trim." These are often designated with letter combinations. The model grade is usually based on features that come standard with a vehicle, though some stylistic differences may also factor in.

Manufacturer's Suggested Retail Price (MSRP)³
The retail price of the vehicle as recommended by the manufacturer - often called the sticker or list price.

Manufacturer's Suggested Retail Price includes the Delivery, Processing and Handling Fee. (Historically, vehicle manufacturers and distributors have charged a separate fee for processing, handling and delivering vehicles to dealerships. Toyota's charge for these services is called the "Delivery, Processing and Handling Fee" and is based on the value of the processing, handling and delivery services Toyota provides as well as Toyota's overall pricing structure. Toyota may make a profit on the Delivery, Processing and Handling Fee.) Excludes taxes, license, title and available or regionally required equipment. The Delivery, Processing and Handling Fee in AL, FL, GA, NC, SC, AR, LA, MS, OK and TX is $15 higher for Trucks, Sienna and SUVs, and $30 higher for all other Toyota vehicles. Actual dealer price may vary. Pricing, specifications, standard features and available equipment are based on information available when this page was produced and are subject to change without notice.

Purchase
To purchase a vehicle is to outright buy it with a cash payment (possibly financed) and assume total ownership of it once all payments are made.

Purchase Option
An option in a lease which allows the lessee to purchase the vehicle at the end of the lease term for a specified price.

Refundable Security Deposit
An amount collected by the lessor at the beginning of the lease to ensure the lessee's compliance with the terms of the lease. The security deposit is generally refundable at lease end, provided there are no excess mileage, excess wear and use charges, outstanding parking tickets or unpaid lease payments.

Residual Value
The lease-end value of the vehicle set at lease inception by the lessor. It's usually calculated as a percentage of the MSRP. This is a component of the payment calculation.

Retail
The price for which a vehicle sells to the general public. You may hear the expression, "That car retails for $19,995." This usually refers to the list price of the vehicle.

Retail Contract
A contract representing the time sale of a vehicle to a consumer.

Scheduled Termination
The end of the lease term, as called for in the lease. It is also referred to as the scheduled maturity date.

Sticker, Monroney, MSRP, List Price, or Retail Price:
The price the dealership is asking on a vehicle; the price the manufacturer has "suggested" be charged for a particular model vehicle. The term "sticker" comes from the fact that it appears on a sticker on a window. The term "Monroney" comes from the name of the US Senator who introduced legislation requiring that all new cars be labeled with a manufacturer suggested retail price (MSRP) and making it illegal for a dealership to remove, tamper with or even change a sticker. When manufacturers increase prices, the dealership must still list their current inventory under the old pricing plan. Manufactures and dealers have, though, found ways to increase sticker values along with offering larger dealer incentives, and holdbacks. The MSRP is a figure which is essentially arbitrary and worthless in the negotiating process.

Term
The duration of the retail contract/lease agreement, usually expressed in months (e.g., 24 or 36 months).