Acceptance Fee

A fee imposed by a lender to cover the expense of establishing a loan. These might include searches with a credit reference bureau to verify the borrower’s identification, as well as registering the lender’s interest in the car with a business named HPI Ltd. This organization maintains the history of all registered automobiles, including if they have been engaged in any total loss insurance claims and whether any MoT certificates given for the vehicle are legitimate.

Administration Fee

This is a cost levied for any modifications to a credit arrangement, such as altering your residence.

Agreement Term

The period of time during which you must repay the borrowed funds.

Amount Of Credit

Your loan provider’s total amount borrowed.

Annual Administration Fee

This is a yearly fee for administering the contract. When calculating the APR, the cost is taken into consideration.

Annual Mileage

The number of miles an automobile subject to certain types of financial agreements can be driven in any year. Typically, the bigger the limit you are allowed or demand, the higher the interest rate charged by the financing provider.

Annual Statement of Accounts

A summary of all payments made and the amount remaining owed on any financial arrangement, normally delivered on the anniversary of the start date of any account.

Approved in Principle

Following an initial review of the financial and other information submitted, this indicates that a financing business is willing to accept a loan of a specified amount. It provides some confidence when you are first shopping for a car and can help you move swiftly to acquire the automobile you desire.


The interest rate is also known as the annual percentage rate. This is the amount you’ll have to pay on top of any amount borrowed over the course of a year, expressed as a percentage of the amount still outstanding.


Unpaid money owing under a financing agreement or other financial commitment.


The tangible item against which you borrow money.


Bad credit History

This term, also known as ‘adverse credit history,’ refers to those who do not have a high credit score and may have had repayment troubles in the past. Credit reference organisations such as CallCredit, Experian, and Equifax can provide you with information about your credit history.


Even if you have a poor credit history, it is still worthwhile to discuss your individual situation with us. We don’t only look at credit ratings, and we frequently grant financing to folks who have been turned down elsewhere.
The first amount of money required to finance – generally the purchase price less any deposit. As you make loan instalments, it describes the amount that remains to be paid.

Balloon Payment

A lump sum agreed upon at the outset of the contract that does not become due for payment until the end of a financial arrangement. It is a method of lowering your monthly repayments that is common in lease buy financing arrangements. At the end of your agreement, you have the opportunity to make the optional balloon payment and purchase the automobile outright.

Basic Renals Paid

The amount you have previously repaid to us in cleared money


Capital Balance

The Capital Balance displays the amount owed under the financing agreement, as well as any interest or other payments that have accumulated throughout the term of the agreement.

Classic Car

There is no definitive definition, but it is widely recognized to be an automobile that is at least 20 years old and has been preserved in or restored to its original condition and look defined by the manufacturer.

Cleared Funds

This is money that has been processed by a bank and is now ready for withdrawal.

Conditional Sale

A transaction in which the buyer only acquires complete ownership of the items after fulfilling some condition – generally full payment of the purchase price. As a result, it is frequently used to represent an agreement to buy an automobile after a deposit has been paid but before any funding that is the subject of a separate loan agreement has been obtained.

Conditional Sale

This is a European Union rule that strives to promote transparency and comprehensive customer protection when you buy anything on credit.


Any legally binding document relating to a third-party provider of your car and related services, such as loan agreements or maintenance plans. These should always be thoroughly reviewed before signing.

Contract Hire

A hiring arrangement in which you have the right to use an automobile but do not have the option to acquire it after the contract time is through. You will typically make a fixed monthly payment for the whole time agreed upon, and at the conclusion of the contract, you will return the car with nothing more to pay – providing you have followed any terms controlling the vehicle’s maintenance and upkeep, as well as the distance covered.

Cost of Credit

A straightforward way of stating how much third-party finance costs on top of the borrowed amount, taking into account interest and any fees levied as part of the loan or finance deal.

County Court Judgement

If you do not repay any money owed to you, a court order may be issued against you. It will specify how much is owed as well as how and when it must be returned. A CCJ, as it is commonly abbreviated, might make it more difficult for you to obtain loans and lower the interest rate you are offered.

Credit Agreement

A document that states how much money you have agreed to borrow and that you have agreed to make regular payments toward repaying the loan in full, including any interest. A corporation or individual provides consumer credit for the purchase of any commodity that requires it.

Credit Broker

A corporation or individual provides consumer credit for the purchase of any commodity that requires it.

Credit History

Your credit history is essentially a record of all the money you’ve borrowed and the payments you’ve made. Your record, rating, or score is a reflection of how you have handled previous credit and present debt.

Credit reference Agency

These businesses keep records on individuals and how they have handled past credit arrangements. The information is made accessible to potential new credit providers in order for them to decide whether or not to accept your application to borrow from them.

Credit Search

A lender reviews your credit history to see whether you can afford to repay the money you have applied to be borrowed from you.


Any individual, corporation, organization, or government owing money.



A borrower is someone who has borrowed money from a bank or another lender.

Default Interest

When you fail to satisfy the requirements of a credit arrangement, interest is added on top of what is normally required under the terms of a financing or loan agreement.

Cleared Funds

This is money that has been processed by a bank and is now ready for withdrawal.

Default notice

An official written notification that a person who has taken out a loan has fallen behind on their payments. It specifies the amount owing, as well as any additional fees that must be paid to cover the expense of drafting the documents alerting them of the default, as well as the time by which all of this must be paid.


Any upfront payment made toward the purchase of a car or other item prior to the start of a loan agreement. The amount you put down as a deposit will determine the number of your monthly repayments, and the greater it is, the more likely your credit application will be granted, and the better the loan conditions you may be provided.


The amount an automobile loses in value as it ages is expressed either in cash or as a percentage of the purchase price.

Discretionary Expenditure

Money that you spend can be reduced or eliminated entirely to help you save money.

Documentation Fee

This is the fee for establishing your financial arrangement and issuing your documentation. The charge is included in the total amount payable and is included for calculating the Annual Percentage Rate.


Early Settlement

The act of terminating a financial arrangement before it is supposed to expire by paying off all remaining funds. This may result in the lender charging extra fees to compensate for the interest they would miss out on as a result of the arrangement not reaching its full term.

End of Contract Charges

The cost of any repairs, replacement components, or refurbishing work required to return a vehicle to “reasonable” condition for its age and mileage at the conclusion of a lease agreement. The British Vehicle Rental and Leasing Association has established formal rules for what constitutes acceptable levels of fair wear and tear.


The worth of your financial interest in a vehicle is calculated as the total price of the automobile less the amount of any loan you still owe. If your automobile is worth more than its guaranteed minimum future value, you can use the difference towards a down payment on your next vehicle. Negative equity occurs when a car has lost so much value that it is worth less than the amount you still owe under your loan arrangement.

Equity Release

A method allowing the owner of a high-value car to realize part of its worth and get that money in the form of a loan for another purpose – often, the purchase of another vehicle

Excess Mileage

Any miles traveled in excess of the amount stipulated in your loan arrangement.



The Financial Conduct Authority is an independent organization that regulates firms that offer financial services in the United Kingdom. Its mission is to ensure that customers are treated fairly and provided with accurate information.


A fee charged by a business, institution or other organization for a service rendered. In the case of a loan, this is often designed to cover the costs of drafting the loan agreement, getting credit references, and establishing the repayment mechanism.

Final Basic Rental

The ultimate sum repayable by you, as mentioned in the agreement or quotation, is referred to as the Final Basic Rental.

Fixed Rate

A credit arrangement in which the rate of interest to be paid is established at the moment the money is borrowed for the duration of the agreement. This provides you the advantage of knowing exactly how much you’ll repay each month for the duration of your arrangement.

Final Payment

This is the final payment due under a financing arrangement. It might include a purchase option fee and a balloon payment.

Flat Rate

The monthly interest rate imposed on a loan for the duration of the agreement’s term. It does not take into consideration how the outstanding capital is lowered when payments are made. This is not to be confused with the Annual Percentage Rate.

Full Service History

The monthly interest rate imposed on a loan for the duration of the agreement’s term. It does not take into consideration how the outstanding capital is lowered when payments are made. This is not to be confused with the Annual Percentage Rate.


Gap Insurance

Guaranteed Asset Protection (GAP) is insurance coverage designed to help bridge any pay gap between the amount paid from an insurer when a car is written off in an accident and either the amount due under any loan arrangement or the original purchase price.

Gross Income

This is your income before taxes and National Insurance is subtracted. When completing the financing application, you may be prompted for this information.

Guaranteed Finance

This is a phrase that no vehicle salesperson should use. There is no such thing as an assurance that an auto financing application will be accepted.

Guaranteed Minimum Future Value

The estimated value of your vehicle at the end of any credit deal. This is also the amount of any required balloon payment. It is calculated using industry data gathered over many years on every make and model of automobile.


Someone who accepts to take on a loan if the individual whose name it was taken out cannot make the repayments. This is frequently necessary when the applicant is young, has little or no credit history, or the loan is a specialized type for a specific product.


Hire Purchase

A method of dividing the expense of purchasing an automobile into reasonable monthly installments. You pay a deposit, and the remainder of the purchase price is divided into equal monthly installments. You do not own the car under a hire purchase arrangement until the final payment is completed.



A payment plan is made up of separate monthly payment amounts. In every financing arrangement, the number of installments is determined before the agreement begins.


Drivers in the United Kingdom are required by law to insure their vehicles. All of our loan arrangements also demand that you have adequate insurance coverage in place for your car at all times.


A loan deal in which no interest is charged in exchange for the ability to pay over a longer period of time, implying that the total amount you pay is the same as the original purchase price. Also referred to as ‘zero percent interest.

Interest Rate

A lender charges a percentage of the purchase price, less any deposit provided, in exchange for agreeing to lend money to the buyer. Regardless of how long the loan is for, the interest rate is almost usually given as an APR to assist you to evaluate the relative cost of different loans.

Invoice Price

The amount paid to the seller or producer of the items being purchased.


Joint Application

When two or more persons apply for and execute a loan agreement for a financing product. Both are then equally responsible for repaying the debt.



Regular inspections of a vehicle’s general condition and replacement of consumable parts, such as tires and windshield wiper blades. Many maintenance activities are performed according to a timetable set by the manufacturer in order to keep the automobile running as smoothly and inexpensively as possible, as well as free of unanticipated difficulties.

Max Lend

Maximum loan amount in abbreviated form. A figure calculated by a lender using a series of parameters to show the most money a borrower may fairly be expected to repay comfortably.

Maximum monthly Instalments

Another way of saying the same thing. A lender may offer a maximum monthly payment amount that it feels an applicant can afford after examining their financial position.

Mileage Allowance

Typically stated as a number of miles per year, this is the maximum number of miles that a loan, lease or rental car provider will allow a borrower to cover in the vehicle. If the total allocation for the whole term is exceeded, penalty costs may apply.

Monthly Rentals

The monthly payment is required under the conditions of the finance arrangement. Because you do not own the car until all repayments, fees, and any balloon payment have been completed, they are referred to as rentals rather than repayments.


Net Income

After all taxes and other legally mandated charges, such as a mortgage, rent, council tax, and utility bills, a person’s income.

Non-Discretionary Expenditure

Spending is mandated by the conditions of a contract, budget, or other obligation. Mortgage, rental, and council tax payments, as well as loan repayments, are examples.


On the Road Price

The whole cost of purchasing an automobile in order for it to be lawfully driven away. This normally includes the initial registration charge (if the automobile is new), the cost of transporting it to your dealer, and your first payment of Vehicle Excise Duty (or road tax).

Option to purchase fee

When a contract is negotiated for a financing business to own a car and lease it to the client, the consumer frequently has the option to purchase the vehicle from the company once all payments are made under the agreement. The Option to Purchase Fee, which is normally paid in conjunction with the last installment of a loan arrangement, is paid to cover the expense of legally transferring ownership from the finance company to the consumer.

Optional Final Payment

The portion of a car’s overall cost is delayed until the conclusion of various forms of loan agreements, also known as the Balloon Payment.


Part Exchange

The name was given to your own automobile in return for a portion of the purchase of a new car.


A list of financial agreement details that you must be told by law to ensure that you are making the appropriate decision in accepting its conditions. This is usually in the form of a ‘Key Features’ document, which is given in a standard style and contains important information such as the APR applicable to your finance, the number and frequency of payments, and the total amount outstanding.


Personal Contract Purchase, to give it its full name. A financial deal that requires monthly payments and, in certain cases, an upfront investment. Your payments are calculated to cover the amount by which the automobile depreciates (loses value) throughout the term of your agreement. Unless you pay the optional balloon payment, you do not own the automobile at the conclusion of the agreement.

Personal Loan

A loan of money made by a bank or other financial organization for personal use.


Quotation Search

A sort of credit search is done by a financing organization to determine the degree of risk you represent while considering whether to accept a loan application. It is also known as a “soft search” because it does not appear on your credit report.



A balloon payment is expected at the end of a car finance arrangement, such as a Personal Contract Plan (PCP) or Lease Purchase. You may be able to refinance this amount, subject to your financing company’s approval, but you may be charged extra interest and perhaps additional costs.


A financing agreement’s settlement or early cancellation.

Regulated Credit Agreement

An agreement stating the parameters of a financing product whose terms are governed by the Consumer Credit Act of 1974.


When a borrower is unable to repay a loan, a lender has the right to claim or take control of any property, assets, or investments offered as security.

Representative APR

Any loan has an annual percentage rate. The APR statistic considers not just the interest rate paid, but also any fees payable, and may be used to compare the costs of different loans.

Residual Value

Your vehicle’s projected worth at the end of your loan or finance arrangement. It is derived using data obtained from the automotive industry over many years.



The Finance and Leasing Association has an accreditation process. It supplies financial firms and franchised auto dealers with training resources to assist guarantee that car purchasers are steered to the best goods for their needs and budget.

Secondary Finance Period

If you wish to continue renting your vehicle after your current agreement expires, you may be able to negotiate a second agreement with a secondary finance period for the same automobile.

Secured Loan

A secured loan is one in which, in exchange for a bigger loan amount, the lender needs something belonging to the applicant as security against the loan. This is generally something valuable, such as a home or a car.


The act of ending a loan by paying off the outstanding sums, including any fees that may apply.


The gap between the amount an insurer will pay out in the case of an accident or the total loss of a vehicle and the amount owed on any credit arrangement. GAP insurance is a specialized product designed to safeguard automobile owners financially from the chance of having to pay this shortfall.

Soft Search

A colloquial word for what is also known as a quote search. The word “soft” refers to the fact that a search of this nature does not leave a record on your credit history.

Super Car

A broad word for an exotic automobile with extremely high performance and frequently unconventional appearance.


Term length

The period of time during which a borrower agrees to repay a financial agreement is usually indicated as a number of months.

Third Party Sources

A third party is an individual or entity that participates in a transaction but is not one of the principals.


The Consumer Credit Act of 1974 created this notion. It established the notion that a creditor cannot repossess items without first obtaining a court order if a debtor has paid one-third or more of the entire price of an item purchased under a credit arrangement.


In the case of a car, the title is the vehicle registration document that provides information on the registered keeper – but it does not establish that they legally own the vehicle, as this may be a third party under the terms of a credit arrangement.

Total Repayable

The entire amount of money, including the loan amount, credit cost, interest, and fees or charges, must be reimbursed to a lender if a loan is repaid within the agreed-upon term. Any financing agreement must include this value.

Trade Value

The value of a vehicle to a car dealer. It is usually cheaper than the price at which a car would be sold to a retail buyer.

Transfer of Legal Title

What happens when all outstanding sums under a credit arrangement are paid, the finance company relinquishes any claim on the automobile, and you obtain complete ownership?



A finance specialist’s duty is to determine if a potential consumer is a reasonable risk and can afford loan payments.

Unsecured Loan

A loan in which money is provided without any additional asset, such as a car or property, being offered as collateral.

Utility Cost

The amount paid by a loan applicant for lights, heat, and water in their home. Because they are mandatory payments, they are frequently subtracted from the applicant’s overall income when determining their fitness for a loan and the amount a lender is prepared to supply.


Variable Rates

If a loan or financing agreement includes a variable interest rate, the rate will fluctuate – and can grow or decrease – in accordance with the rate on which the agreement is based. This is usually the Bank of England’s base rate. This is often referred to as a variable interest rate.


A tax paid to the government by the registered owner of each vehicle that permits that vehicle to be driven on public highways. Known colloquially as “road tax.”


The number assigned to a vehicle. Every vehicle has a unique VIN, also known as the chassis number, which is used to establish a vehicle’s identity and avoid fraud. Unlike a license plate, a vehicle’s VIN cannot be altered.

Voluntary surrender

A method through which a borrower can voluntarily return an item to their lender, such as a car when they are unable to make repayments on any loan taken out for it. It enables a borrower to avoid a potentially time-consuming legal process, court appearance, and contact with their lender. However, the borrower’s credit rating may still suffer, and they may be required to pay any difference between the price realized when the asset is sold and any outstanding debt.

Voluntary Termination

The right to terminate a financing agreement and return it and the vehicle that is the subject of the agreement to the finance firm after paying 50% (regulated agreement) or 80% (unregulated agreement) of the total amount payable.



A promise that if something goes wrong with an automobile (or other goods) within a certain time frame, the manufacturer or seller will fix it.

Wear and Tear

A phrase used in the automotive and motor finance industries. It’s intended to distinguish between elements in a car’s condition that may be fairly expected to arise as a consequence of regular use and age and those that can be reasonably believed to be the result of neglect and/or inadequate or no maintenance.


A vehicle that is uneconomical to fix given its worth and the cost of such repairs, and so becomes the subject of a complete loss insurance claim.