Glossary

If you are not familiar with some of the terms and trade jargon you will read in the motoring press and on the Internet relating to car leasing, pcp’s, contract hire, finance leasing etc, we have included some brief definitions of the expressions you will see most commonly used.

If you have any queries as to the most suitable vehicle funding options we will be pleased to offer our recommendations, either telephone or contact us with your enquiries.

Glossary of leasing, contract hire and finance terms A - D

3 x 35, 6 x 35 etc
3 / 6 The number of initial payments. 23, 35, 47 The number of payments within the agreement
Advance
Total amount of a loan
Annual Percentage Rate or APR
The total interest payable on a loan
Balloon
Payment due at the end of a Contract Purchase agreement which pays to buy the vehicle. Often clients return the vehicle and replace with new one
Car Allowance
Payment made by a company to an employee in lieu of a company car. Normally paid monthly through salary and is broadly equivalent to the leasing cost of the car
County Court Judgment or CCJ
County court order made against a borrower who has defaulted on payments
Contract Hire
Fixed period vehicle rental e.g 12 months, 24 months available to include vehicle maintenance etc. Payments include VAT
Contract Hire (Personal)
As Above, but for private individuals not VAT registered
Contract Purchase
Agreement to purchase the vehicle over a set period of time. Usually includes full maintenance (like Contract Hire). Often includes final balloon payment
Credit Score
Points system used by lenders in assessing a clients Credit Rating e.g Home Owner, Tenant, Electoral Role. Each point earned improves the Credit Score
Credit Search
A credit check carried out by a credit reference agency to check your past and current credit record e.g If you have CCJs, defults etc. Check Your Credit File
Deposit
The amount of money you pay towards the vehicle agreement
Depreciation
The decreasing value of a vehicle over a period of time