A
adverse credit - borrowers with elements of adverse credit are offered higher rates than standard Full Status applicants are, usually with terms and conditions relating to the extent of their adverse credit history.
APR - Annual Percentage Rate is the interest rate charge on your loan. It is the cost of credit expressed as a yearly rate. The lower the rate, the better the deal.
B
bad credit - a term used to describe a poor credit rating. Common practices that can damage a credit rating include making late payments, skipping payments, exceeding card limits or declaring bankruptcy. "Bad Credit" can result in being denied credit.
C
car finance - an upmarket term for a personal loan to buy a car.
car loan - a personal loan to purchase a car.
CCJ - County Court Judgement is the term for a judgement made against a person or company for debt in the county court. Generally if a CCJ is paid in full within 30 days of the date of the judgement it won’t appear in the credit register. CCJ’s are a matter of public record. They are catalogued and held for 6 years with the Registry Trust. If a judgement is settled after the 30 day period it will be entered into public record and this will affect your credit rating.
credit agreement - when you sign a credit agreement between you and the lender for a car that you want. You have agreed to borrow the money off the lender and keep regualr repayments.
credit rating - an individual or corporation's history of repaying past loans. Credit rating are used as a benchmark to assess the future ability of a creditor to pay back loans.
D
depreciation - the decline in the value of a car due to normal wear and tear. Based primarily on the number of miles driven (the more miles driven, the greater the depreciation) but also may be influenced by vehicle model, maintenance, general consumer demand for the model and the maker's reputation for quality.
E
Equity - this is the difference between the value of your car and what you have left to pay off the loan.
F
finance lease - a finance lease is a full-payout, non-cancelable agreement, in which the lessee is responsible for maintenance, taxes, and insurance.
fixed rate - if the interest rate charged and/or the monthly payments are fixed, i.e. not going up/down with normal interest rates, throughout the full term of the loan, then the rate is called a fixed rate.
flat rate - a fixed charge for goods and services that does not vary with changes in the amount used, volume consumed, or units purchased.
G
GAP insurance - Guaranteed Asset Protection is a type of insurance offered to car lease customers. It pays the difference between what you own and what the vehicle is worth in the event the car is stolen or destroyed.
H
hire purchase - it is a procedure for purchasing goods under which the purchaser pays a deposit on receipt of the goods followed by a number of instalments until the debt is cleared. The goods do not become the property of the purchaser until the last instalment has been paid. In the event of the default of the purchaser in respect of the instalments, the firm can resume possession of the goods in question.
I
Insurance - protection against a specific loss over a period of time that is secured by the payment of a regularly scheduled premium.
J
K
L
lease purchase - this finance option is similar to hire purchase offering a flexible deposit, flexible repayment periods, and a flexible percentage of the purchase price can be deferred to the end of the agreement.
loan - an amount of money a borrower will take out from a lender to pay for a purchase.
M
minimum guaranteed future value - is sometimes crops up in personal contract purchases. At the end of the contract, the minimum guaranteed future value is the guaranteed minimum that your car will be worth.
N
negative equity - if your car is worth less than the amount you have left to pay off the loan.
O
Outstanding finance -
P
part exchange - you can exchange your existing car as part payment for your new car. The dealers may offer you a better deal for your old car than you would through a private sale, in order to sell you a new car.
personal contract hire - this is similar to contract hire, but is geared towards individuals instead of business. This is a very good finance option for anyone who wants fixed cost motoring or is leaving the company car schemes. All scheduled servicing, replacement tyres, and unforeseen repairs are budgeted for in one simple monthly payment. This finance option also takes care of depreciation and disposal worries. Businesses may be able to claim VAT, but private individuals cannot.
personal contract purchase - is a new alternative to hire purchase loans. The car is leased by the individual from the dealer after paying an initial deposit. Unlike Hire Purchase the cost of the car is not spread over the loan period. This means that the monthly payments are lower, but the vehicle is not paid for at the end of the loan period. At the end of the payment period you can pay a balloon payment to keep the car, return the car to the dealer or part exchange for another car.
Q
R
residual value - this is the value of your used car taking into account depreciation, condition and mileage.
S
secured loan - this is a type of loan where the loan is guaranteed by an item such as your car or home. If you do not keep up the car loan repayments, the finance company can repossess the item.
short term contract hire - this is similar to Contract Hire, except that is available for a shorter term, up to a year. This is a good solution if you require extra vehicles for short periods or for staff that may only require a vehicle for a brief duration.
T
trade value - this is how much your vehicle is worth in the car trade. This will be lower than your cars retail value or what you would get for it in a private sale because car traders need to allow for their own profit when selling the car.
U
unsecured loan - a type of finance where the finance is not guaranteed, opposite of secured loan.
V
variable rate - if the interest rate charged can go up/down with normal interest rates during term of the loan, then the rate is called a variable rate.
vin number - chassis number for the vehicle. Serial number for the car.