Acceptance Fee:

One-off payment to cover the administration of setting up the finance agreement & credit searches. Paid at the commencement of the finance agreement with the first payment or rental.

 

An extra which can be added to the vehicle, which is not part of the manufacturer's specification.

 

 

A fee charged to cover the cost of amending an agreement.

 

 

 

Agreement/document:

A legally binding contract made between a customer and a finance company for the

purchase or use of a vehicle. The agreement is binding once it is signed on behalf of the finance company.

 

 

Also known as Annual Percentage Rate, it is the interest rate which a customer will pay on a finance agreement, including all fees.

 

 

A statement outlining the payments made to date including any paid late etc.

 

 

A payment or rental which is outstanding.

 

 

The vehicle or item that is being financed.

 

 

This is insurance that protects your financial repayments in the event of death, accident, illness, sickness, redundancy or financial insolvency.

 

 

Amount financed by the finance company on behalf of the customer to cover the cost of the vehicle.

 

 

Balance sheet:

One of the three essential measurement reports for the performance and health of a company, along with the Profit and Loss Account and the Cashflow Statement. The Balance sheet is a 'snapshot' in time of the assets and debts in the company, and represents the value of the company at that time.

 

 

Balloon Payment:

A payment agreed at the commencement of the contract that is deferred to the end of the finance agreement and payable by the customer.

 

 

On-the-road price that the vehicle is sold at.

 

CCA

(Consumer Credit Act): 1974
Government act which protects the individual by regulating the operations of financial institutions and financial providers. For more information visit: www.oft.gov.uk

A private individual's agreement, where the borrowing or total rentals are less than £25,000 is regulated by the agreement.

 

 

Consumer Credit Licence:

To comply with the law, all retail businesses must have a credit licence to carry out certain activities in the field of credit and hire.

 

 

These are the suite of contracts we offer: Agility (A form of Contract Purchase), Operating Lease, Hire Purchase, Hire Purchase with Balloon and Finance Lease: See Finance Explained

 

 

This is the amount of money borrowed, calculated by the cash price of the vehicle, less any deposit.

 

 

Credit check undertaken by our underwriters.

 

 

 

Data Protection Act (DPA) 1998:
The Data Protection Act regulates how personal information is used and protects against misuse of personal details.

 

 

This is the amount of money which is paid at the commencement of the vehicle. As the deposit increases the monthly payments or rentals decrease.

 

 

Depreciation:

A reduction or decline in the vehicle value over the lease term caused by condition, age and mileage.

 

 

Banking term for monthly or annual payments that are taken from a banking account, upon written customer authorisation.

 

 

The Driver and Vehicle Licensing Agency, responsible for maintaining a national register of drivers and vehicles and collecting vehicle excise duty (road tax).

 

 

The termination of a finance agreement by paying all monies outstanding before the lease end date.

 

 

Any miles that may exceed the initial mileage specified in a finance agreement.

For example: contracted to use 36,000 miles over a three-year period and the vehicle is returned with 40,000 miles, the excess mileage is 4,000 miles.

 

 

A charge based on miles driven over the amount contracted in the lease agreement on return of the vehicle. The amount is calculated by taking the excess mileage rate of the vehicle and multiplying it by the number of miles covered above contracted miles agreed.

 

 

When the vehicle is damaged beyond normal expectations in a contract term of a vehicle, charges are applied. Examples of excess wear & tear can be found in the Vehicle Return Standards of this website or in the Vehicle Return Standards brochure found in the Welcome Pack.

 

 

This is the final payment due on the finance agreement.

 

 

The FLA Lending Code 2004 sets out standards of good practice for the industry and is intended to reassure anyone who applies for finance from FLA’s full members that they are doing business with reputable organisations. For more information please visit: www.fla.org.uk.

 

 

To learn about this contract type: See Finance explained

 

 

This is an acronym for the Financial Services Authority who has regulated all insurance activity within the market place since 14 January 2005.

 

GAP insurance:

There are two options:

Finance GAP Insurance is an insurance policy designed to cover the difference between the amount owed to the Finance company and the insurance payout received in the event of a vehicle being written off as a total loss.

Invoice GAP Insurance is an insurance policy designed to cover the difference between your insurance payout and the invoice price you paid for the vehicle in the event of a vehicle being written off as a total loss.

 

 

Guaranteed Minimum Future Value.

 

 

A payment agreed at the commencement of the contract that is deferred to the end of the finance agreement and payable by the customer.

 

 

To learn about this contract type: See Finance explained

 

 

A registered information-related check on a vehicle to ascertain if a vehicle is financed, previous ownership details etc.

 

 

To learn about this contract type: See Finance explained

 

 

An indemnity is a form of guarantee which may be requested by a finance company. If the consumer fails to pay an instalment, the person who gives the indemnity/guarantor will be required to make the payment instead. Regulated agreements are governed by 'The Consumer Credit Act'.

 

 

This is a penalty/fee charged from the Finance Company to a consumer for failing to make payments within a grace period or on the contractual due date.

 

 

A term referring to the 'use only' of a vehicle, by a customer entering into an agreement with a finance company, it includes both payout and residual risk leasing such as Contract Hire or an Operating Lease for consumers. See Finance Explained

 

 

The vehicle hirer, customer or user of the vehicle who signed the lease agreement.

 

 

Usually the Finance/Leasing Company or the legal owner of the vehicle who sets the lease terms.

 

 

The price of the vehicle. This can be used for taxation purposes if the vehicle is used for business use, but will not include discounts that were applicable.

 

 

Any larger payment made.

 

 

Maintenance Contract:

This is a contract that can be added to a vehicle contract for an extra cost, from the Finance/Leasing Company which can take care of servicing needs, repairs and day-to-day costs such as tyres, exhaust and battery replacement.

 

Mapfre Asistencia:
The underwriters for all GAP Insurance products sold by Mercedes-Benz Financial Services UK Limited.

 

Same as above, including any initial mileage if a used vehicle.

 

 

 

 

The number of anticipated miles (covered in one year): 10,000, 12,000, 15,000, 20,000, etc.

 

 

The scheduled payment that is set out at the commencement of the agreement.

 

 

The scheduled payment for the rental of the vehicle and any other extras selected.

 

 

Ministry of Transport Certificate advising that the vehicle is roadworthy.

 

 

Manufactures Recommended Price Residual Value. This is usually estimated at the beginning of an agreement and represents the value of the vehicle at the contract end.

 

 

Norwich Union underwrite all Motor Insurance provided by Daimler Insurance Services UK Limited.

 

 

A continuation of a finance agreement in a third party’s name.

 

 

Also known as the manufacturer’s recommended retail price, and includes all taxes, delivery charges and the cost of the Road Fund Licence.

 

 

To learn about this contract type: See Finance explained

 

 

A fee payable at the end of an agreement when the title changes from the finance company to the customer. A fee will be debited at the end of a finance contract, together with a final payment. If ownership is selected, the vehicle will then belong to you.

 

 

Deferred final payment on 'Purchase' agreements.

 

 

Depending on your contract type, you have an option to purchase the vehicle for a fee should you wish to keep it at the end of your contract.

 

 

Total outstanding figure of our rentals at any given time.

 

 

Early termination or settlement.

 

 

A form of insurance that protects your financial repayments in the event of death, accident, illness, sickness, redundancy or financial insolvency. Also see Assurance.

 

 

A finance agreement where there is an option to purchase the vehicle for an agreed fee or either return the vehicle to the finance company or part-exchange.

 

 

A nominal rental to be paid in order to continue with a finance lease agreement where all the outstanding payments have been paid but the customer defers selling the vehicle to a later date.

 

 

The underwriters for GAP Insurance products taken out before the 1st April 2008 and sold by Chrysler Group Finance and the current underwriters for the PPI product sold by Chrysler Group Finance.

 

 

Pence Per Mile. This is a term for excess charge on a vehicle that uses more than the specified contractual mileage.

 

 

This refers to the vehicle price value when new, together with the additional cost of extras. The value is then used for taxation purposes by the Inland Revenue.

 

 

The initial term of the lease.

 

 

Settlement, or early termination.

 

 

An agreement which is regulated by the Consumer Credit Act. From 1st April 2008 all agreements will be regulated with the exception of Limited Companies, PLCs and Partnerships (of four or more), whatever the amount financed.

 

 

A fee which covers the administration involved in re-instating an agreement.

 .

 

An agreement where the customer pays a monthly amount to cover the repair and maintenance of the vehicle.

 

 

When a monthly payment is returned by the bank as unpaid, the finance company will call for the payment again.

 

 

The amount the vehicle is worth at the end of the lease.

 

 

A charge in the monthly payments to accomodate a customer's requirements.

 

 

These are set to check the return and outlined in the Vehicle Return Standards section of the website or in the Vehicle Return Standards brochure enclosed in the customer's Welcome Pack.

 

 

Road Fund Licence, also known as the Tax Disc.

 

 

With a Finance Lease agreement, at the end of an agreement the vehicle may be collected and sold on a customer's behalf with the amount returned to the customer, minus fees.

 

 

An extension period to a lease, also known as a 'Peppercorn rental'.

 

Security Deposit:

A lease deposit collected at the lease signing which is used to cover lessee amounts owed, but not paid, at contract lease end and is refundable.

 

Service Contracts:

See Repair and Maintenance contracts.

Settlement figure/quote:

A termination figure calculated on the outstanding amounts including any applicable penalties.

SMR:

Service Maintenance and Repair Contract.

Transfer of legal title:

Where all amounts outstanding have been paid and the customer retains the vehicle. Legal title will then pass from the finance house to the customer.

Termination Fee:

The cost imposed by a financial/Leasing company for terminating a contract early.

Terms and Conditions:

Legal Terms and Conditions which apply to the finance agreement. These may be found in the Welcome Pack.

Total amount financed:

Amount borrowed including accessories or extras.

Total amount payable (TAP):

The sum of all the monthly payments or rentals including the final Repayment.

Total monthly repayments:
The amount payable monthly, including any options that have been selected as extras.

Underwriting:
Assessment of credit-worthiness.

Unregulated Agreement:
An agreement which is not regulated by the Consumer Credit Act.

Use of personal information:
In accordance with the DPA any personal information will be held securely and not passed on to third parties.

V5c:
A registration document (logbook). Depending on the finance contract, this must be returned at the end of the finance agreement.

VAT:
Value Added Tax. This is a tax on consumer expenditure. Businesses (that are VAT registered and fully taxable) do not bear the final costs of VAT. They are able to charge VAT on the supplies that they make (output VAT) and recover VAT on purchases that they have made (input VAT)

Write-off:
If a vehicles' value is less than the cost to repair it, an insurance company will declare the vehicle a 'write-off'. In some instances it may be more cost effective to replace your vehicle than to repair it.

1st monthly payment:
The first monthly rental due on the vehicle.