Termination fee. See Disposition fee or disposal fee.

Three-payment rule. See Open-end lease.

Time value of money.

The value derived from the use of money over time as a result of investment and reinvestment. This term may refer to either present value or future value calculations. The present value is the value today of an amount that would exist in the future with a stated investment rate called the discount rate. For example, with a 10% annual discount rate, the present value today of $110 one year from now is $100. Future value is the value in the future of a known amount today with a stated investment rate. For example, with a 10% annual investment rate, the future value in one year of $100 today is $110. In either case, the interest rate used reflects the lost opportunities for return from alternative investments.

Title.

Legal document that identifies the owner of the vehicle. The lessor or assignee, not you, holds title to the leased vehicle.

Total contractual obligation.

The sum of the capitalized cost reduction, the total of base monthly payments, and other charges due under the lease agreement. The total contractual obligation excludes any security deposit as well as sales taxes and any other fees and taxes paid to a third party. If the total contractual obligation exceeds $25,000, the Consumer Leasing Act does not apply.

Total monthly payment.

The base monthly payment plus monthly sales or use taxes and any other monthly charges.

Total of payments. The sum of the periodic payments, the end-of-term disposition fee, any other charges, and all amounts due at lease signing or delivery, minus refundable amounts such as a security deposit, and any monthly payments included in the amount due at lease signing or delivery.

Trade-in.

The net value of your vehicle credited toward the purchase or lease of another vehicle. If you own the vehicle being traded in, you sell it to the dealer or lessor. If you are leasing the vehicle being traded in, you are turning in the vehicle (either at the scheduled end of the lease or upon early termination) to the dealer or lessor who has agreed to pay any remaining balance on your agreement. The amount credited may be positive or negative, depending on the agreed-upon value of the trade-in vehicle and any remaining balance on your agreement.