dealer holdback
An allowance paid by the manufacturer to the dealer to allow the dealer to purchase a vehicle for less than the invoice price.

dealer incentive
A special payment from the manufacturer to the dealer to help the dealer sell slow-selling models.

dealer preparation fee
A fee charged by some dealers to cover the costs of preparing a vehicle for delivery to the customer. The manufacturer may reimburse the dealer for this expense.

dealership
A company authorized by a manufacturer to sell that manufacturer's products.

debt-to-income ratio
The ratio, expressed as a percentage, which results when a borrower's monthly payment obligation on long-term debts is divided by his or her gross monthly income.

default
Failure to meet legal obligations in a contract, including failure to make payments on a loan. A loan is generally considered to be in default when a payment is 30 days past due.

deferred interest
Interest added to the balance of a loan when monthly payments are not sufficient to cover it. (See negative amortization.)

delinquency
Failure of the borrower to make payments on time.

deposit
Cash paid to the seller when a formal sales contract is signed.

depreciation
A reduction in the value of an asset. Most vehicles depreciate the moment they are sold.

destination charge
The fee charged by the manufacturer to ship a vehicle to the dealership. This fee is passed on to the customer, and is included on the sticker.

discount points (or points)
Money paid to a lender at closing in exchange for lower interest rates. Each point is equal to 1% of the loan amount.

disposable income
Amount of income over which an individual has complete discretion.

document review
Fee charged by lender for review of documents necessary to fund a loan.

down payment
Money paid at the time of purchase to reduce the amount to be financed. The down payment will be the difference between the purchase price and loan amount. Often, a larger down payment means a lower APR.

due-on-sale clause
Provision in a loan allowing the lender to demand immediate payment of the loan balance upon sale of the vehicle.