Vehicle Purchase Worksheet (Page 2 of 2) in pdf

Terms to know…

Air Conditioning Levy: Air conditioners designed for use in automobiles,

16.

Trim: A trim level further identifies a vehicle. It is a different style of

station wagons, vans and trucks are subject to an excise tax of $100 by

that particular model.

Canada Revenue Agency. Air conditioners specifically designed for

motor homes are not subject to the tax. The tax is imposed on vehicles

17. Vehicle purchase price:

The vehicle purchase price must be at or

imported or manufactured in Canada at time of delivery to the

below the advertised price on TV, billboard, print, web and any other

purchaser; in most cases that’s the automotive dealer.

form of advertisement. This price must include the total cost of the

vehicle including but not limited to, all fees and charges such as the cost

AMVIC levy: The Alberta Motor Vehicle Industry Council (AMVIC)

of accessories, optional equipment physically attached to the vehicle,

charges all licensed businesses a levy on every vehicle they sell or lease

transportation charge transportation charges and any applicable taxes

to a consumer. The levy is $6.25/vehicle. AMVIC uses revenue from the

or administration fees. Only GST and financing charges can be added.

levy to fund AMVIC operations, a Consumer Compensation Fund and to

provide enhanced investigation and education programs.

Financing

Annual kilometre allowance: The number of kilometres per year that

you can drive the leased vehicle without incurring additional fees. If

18. Amount financed: Refers to the actual amount of credit made available

you exceed the limit, the additional cost will be calculated at a set

to a borrower in a loan. This is often called the loan principal. This

value per kilometre in excess.

amount must be repaid plus any interest accrued.

Demo vehicle: A demo vehicle, or demonstrator vehicle, is a vehicle

19. APR: APR stands for annual percentage rate which is the annual rate

that was purchased new by the business operator and used solely for

that is charged for borrowing. It is expressed as a single percentage

the normal business of the business operator.

number that represents the actual yearly interest rate for the cost of

funds over the term of a loan.

Depreciation: This is the difference between what you paid for your

vehicle and its eventual selling price.

20. Balloon payment:

A lump-sum payment due at the end of an amortized

loan. Since the entire loan amount is not amortized over the life of the

Final purchase price: The amount you are purchasing the vehicle for

loan, the remaining balance is due as a final repayment to the lender.

inclusive of all fees and taxes but excluding cost of financing. The final

balloon payment is offered as a way of reducing your regular payments.

purchase price cannot exceed the advertised price unless the buyer

consents to add-ons not included in advertisement.

21. Cost of borrowing: The cost to you to borrow money, including

interest, fees and any other costs associated with the loan.

Fuel-Inefficient Vehicle Excise Tax: An excise tax on a fuel-inefficient

vehicle that’s payable to Canada Revenue Agency by the manufacturer

22. Down payment: An initial payment made when a vehicle is bought on

or wholesaler at the time of delivery to the purchaser; in most cases the

credit, i.e., financed. This is part of the cost of the vehicle. Finance

automotive dealer.

charges are not charged on a down payment.

Lien: A legal claim against an asset (chattel), e.g., vehicle, which is used

23. Financing: A vehicle purchased through financing allows you to acquire

to secure a loan and which must be paid when the property is sold.

the vehicle through a loan. You will know exactly what your interest

rate and monthly, or bi-weekly, payments will be during your specific

Make: The name of the company that manufactures the vehicle, e.g.,

term of the loan. The lender holds a right in your vehicle and may

Ford, Toyota, BMW, etc.

repossess it for non-payment. You may make a down payment at the

start of the loan. At the end of your term, you fully own the vehicle and

10. Model:

An automobile model is a particular brand of vehicle sold under

make no further financing payments unless there is a balloon payment.

a marque by a manufacturer, usually within a range of models, usually

of different sizes or capabilities, e.g., Civic, Grand Cherokee, A4 etc.

24. Term: The specific amount of time you have to repay a loan.

11. Negative equity: Negative equity occurs when the value of an asset

Leasing

used to secure a loan is less than the outstanding balance on the loan.

For example, you may owe more on your vehicle than it is worth.

25. Annual kilometre allowance: The number of kilometres per year that

you can drive the leased vehicle without incurring additional fees. If

12. Odometer reading: An odometer is an instrument that indicates

you exceed the limit, the additional cost will be calculated at a set value

distance traveled by a vehicle. The odometer reading can usually be

per kilometre in excess.

found on the dashboard, it may be electronic, mechanical, or a

combination of the two.

26. Capitalized cost: Capitalized cost is the selling price (before GST) of the

vehicle you are leasing. This is what you would pay if you were buying

13. Stock number: A dealership’s in-house stock number.

the car.

14. Tire levy: Alberta Environment & Sustainable Resource Development’s

27. Lease: A lease is a contract by which one party uses a vehicle for a

environmental fee on the sale of all new tires sold in Alberta. $4/tire for

specified time in return for periodic payment. This is essentially a long-

all passenger cars and light trucks. $9/tire with rims sizes greater than

term vehicle rental. The lessor retains title to the vehicle you are

19.5 inches for use on larger vehicles licensed for highway use,

leasing. GST is usually payable on the lease payments. At the end of a

including semi-trailer transport trucks, buses, and trailers.

lease you return the vehicle, you do not own it. Often the lessor will

give the lessee the option to buy out the vehicle at the end of the lease.

15. Trade-in Value: The amount of money a dealership is willing to pay for

GST is usually payable on the buy-out amount.

your vehicle. Sometimes a trade-in value can be lower than what you

still owe a bank or finance company for your vehicle, this is called

28. Residual value: Residual value is the anticipated value of the vehicle

negative equity.

when your lease is over.

29. Term: In leasing, term refers to the specific amount of time you will be

making payments for usage of the vehicle. When the term is up, you

must return, or buy out, the leased vehicle.

Vehicle Purchase Worksheet Page 2

Related Articles

Related forms

Related Categories