Acceptance Fee:

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

 

A chosen extra which can be added to the specification of a vehicle.

 

 

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

 

 

Advance:

To learn about this contract type: See Finance explained

 

 

 

Agreement/document:

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

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

 

 

Also known as Annual Percentage Rate, it’s the interest rate which you pay on a finance

agreement.

 

 

A statement to show what payments have been made to date, paid late, etc.

 

 

A payment which is outstanding.

 

 

The vehicle itself.

 

 

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

 

 

Amount financed by us for 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 who owns what in the company, and what assets and debts represent the value of the company.

 

 

Balloon Payment:

A term used referring to the final payment of a finance agreement, payable at contract

end on some types of finance agreements.

 

 

Price the Dealer is selling the vehicle for.

 

CCA

(Consumer Credit Act): 1974
Government act which protects the individual by regulating the operations of financial

institutions and financial providers. We are regulated by the Consumer Credit Act.

For more information visit: www.oft.gov.uk

Your agreement will be covered by the Act, provided you're not a limited company and

you're borrowing £25,000 or less, or your total rentals and other payments under a hiring agreement are less than £25,000.

 

 

Consumer Credit Licence:

To comply with the law, finance businesses must have a credit licence to carry out

certain activities in the field of credit and hiring.

 

 

These are the choice of contracts we offer: Contract Purchase, Operating Lease, Hire Purchase, Hire Purchase with Balloon, Finance Lease, and Advance: See Finance Explained

 

 

This is the amount of money you borrow, calculated by the cash price of the car and deducting any deposit you put down

 

 

Credit check undertaken by our underwriters.

 

 

Credit Protection Insurance CPI:

A form of insurance that protects your financial repayments in the event of death,

accident, illness, sickness, redundancy or financial insolvency. (Also see Assurance.)

 

 

Person/company the vehicle is bought from.

 

 

This is the amount of money which you have elected to pay upfront. The higher the deposit you choose to pay, the lower the payments will be.

 

 

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 your account at your written request.

 

 

The Driver and Vehicle Licensing Agency, responsible for maintaining registers 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.

 

 

The miles that you exceed over the initial mileage that is specified in your finance agreement.

 

Example: If you have contracted to use 36,000 miles over a three-year period, and you use 40,000 miles, your excess mileage is 4,000 miles.

 

 

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

 

 

When the vehicle is damaged beyond what is normally expected in a contract term of a vehicle, charges are applied. Examples of excess wear & tear can be found in the 'Vehicle Return Standards' section of this website or in the 'Vehicle Return Standards' brochure we sent you in your 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 our market place since 14 January 2005.

 

An insurance policy designed to cover a shortfall between the outstanding finance and the vehicle insurance settlement figure, in the event of a vehicle being written off when involved in an accident or stolen.

 

 

Guaranteed Minimum Future Value.

 

 

This is a guaranteed future value of the vehicle agreed at the start of your contract.

 

 

To learn about this contract type: See Finance explained

 

 

A registered information-related check on a vehicle.

 

 

To learn about this contract type: See Finance explained

 

 

An indemnity is a form of guarantee which can be requested by a finance company. It is where the consumer fails to pay an instalment, and the person who gives the indemnity/guarantor will be requested by the Finance Company involved 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.

 

 

This is a finance agreement similar to Hire Purchase, but where you can reduce monthly payments by having a Balloon Payment at the end of the agreement, which includes an option to purchase. Agility also falls into this category.

 

 

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.

 

 

Allowance on the vehicle throughout the term of the contract.

 

 

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

 

 

This is how many miles you anticipate covering per year: 10,000, 12,000, 15,000, 20,000, etc.

 

 

The scheduled payment you make for your vehicle and any other extras selected, such as maintenance, etc.

 

 

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

 

 

Ministry of Transport Certificate to say 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 DaimlerChrysler Insurance Services.

 

 

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

 

 

Sometimes called 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

 

 

Option to Purchase fee

Depending on your contract type, you can own your car at the end of your contract.

If you choose to do this, a fee will be debited at the end of your contract, along with your final payment. The vehicle will then belong to you.

 

 

Balloon Payment on Contract 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. Or, you have the option to:

 

1. Purchase the vehicle for the Guaranteed Future Value

(this is not a guaranteed future value)

2. Return the vehicle and walk away

3. Return the vehicle and order a new one

 

 

Payments or rentals which are outstanding at any given time.

 

 

Early termination or settlement.

 

 

When a customer is having problems in making the monthly payments or rentals.

 

 

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

 

 

Personal Contract Purchase. A term used for a finance agreement where, at the end of the contract term, you have an option to purchase for the manufacturer's Residual Value, or return the vehicle.

 

 

A nominal rental to be paid in order to continue with a finance lease agreement where all the money outstanding has been paid, but you wish to defer selling the vehicle at that moment in time.

 

 

The underwriters for all the GAP and CPI insurance products sold by DCFS.

 

 

Pence Per Mile. This is a type of 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. This means: the customer is not a limited company or the total amount of credit advanced is £25,000 or less. This credit amount excludes any advance payment and interest charges.

 

 

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 not paid, the finance company will repoll for the payment again to try to collect it from the bank.

 

 

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

 

 

If a customer is having financial difficulties, we can agree to change the payments for a period of time to assist him or her.

 

 

Please make sure that you inform yourself about the condition in which we would like you to return your vehicle.  Information can be found in the Vehicle Return Standards section of the website or in the Vehicle Return Standards brochure we sent you in your Welcome Pack.

 

 

Road Fund Licence, otherwise known as the Tax Disc.

 

 

If you have a Finance Lease agreement, we can collect and sell the vehicle at your request. The cost of collection and sale will be deducted from the sale proceeds, most of which will be returned to you.

 

 

An extension period to a lease.

 

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:

This is the same as maintenance and repair contracts.

Settlement figure/quote:

A termination figure calculated on the outstanding amounts, plus any penalties if applicable.

SMR:

This refers to Service Maintenance and Repair.

Transfer of legal title:

Where all amounts outstanding have been paid and you are keeping the vehicle.

Legal title will then pass from the finance house to you.

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. Please refer to your contract supplied in your welcome pack.

Total amount financed:

Amount borrowed.

Total amount payable (TAP):

This is the sum of all the monthly payments or rentals and the Final Repayment.