Car Leasing Jargon Buster

AC Charging

Alternating Current charging, typically used for home and workplace charging via a wallbox.

Adaptive Cruise Control (ACC)

A cruise control system that automatically adjusts speed to maintain a safe distance from the vehicle ahead.

ADAS

Advanced Driver Assistance Systems. Electronic safety features such as lane keeping assistance, adaptive cruise control and emergency braking.

Administration Fee

A fee charged by some brokers or finance companies for processing a lease application or making changes to an existing agreement.

Advance Rental

An initial payment or rental which is due at the start of the contract.

Advisory Fuel Rates (AFR)

HMRC-approved fuel reimbursement rates for company cars.

Agreement

See Documents.

Amortisation

The process of paying off a debt and accrued interest in regular amounts of equal value, e.g. when you pay off a mortgage or car loan.

Android Auto

Technology allowing compatible Android smartphones to integrate with a vehicle's infotainment system.

Apple CarPlay

Technology allowing compatible iPhones to integrate with a vehicle's infotainment system.

Approval

Acceptance by a finance company or funder to provide finance.

APR

Annual Percentage Rate — to allow comparison of different loans, the APR shows an annualised rate which takes into account all fees and charges payable.

Asset

Anything which is owned and has commercial value — it can be financial in nature (money, shares, invoices, securities), physical (buildings, machinery, vehicles, land), or qualitative (qualities, skills, things of great intrinsic value).

Authority

Given when the finance company confirms that all necessary documents are in place and that the vehicle can be delivered to the end user.

Automatic

An automatic vehicle has a transmission that automatically changes the gears according to the speed of the car.

Balloon payment

This is the final figure payable on some finance agreements (often a guaranteed value, please see "GMFV").

Bankruptcy

When an individual or company has reached the point of being totally incapable of repaying debts. When this happens to a company they will go into Administration followed by liquidation or receivership.

Battery Warranty

A manufacturer's warranty covering the vehicle's traction battery against defects or excessive capacity loss.

BIK

Benefit in Kind. This is calculated on the vehicle's 'List Price' (for tax purposes) and includes VAT, the list price of any options including VAT and the manufacturer's delivery charge on the day before the vehicle is registered. This figure is provided to the customer to assist them in their reporting to the tax office and is used to assess the amount of tax a driver will pay as a result of having a company car.

Blind Spot Monitoring

A safety system that alerts the driver to vehicles in adjacent lanes.

Brake Horse Power

Also known as 'bhp'. Bhp is the measure of an engine's horsepower without the loss in power caused by the gearbox, generator, water pump, and other auxiliary components such as alternator, power steering pump etc.

Breakdown Recovery

A mobile repair and collect service; for instances when the vehicle will not start or has broken down either at home, on a road or motorway, or when travelling abroad. Generally, most new cars have breakdown cover as part of the warranty package which is generally offered on vehicles less than 3 years old.

Broker

A broker is a party that mediates between the buyer, seller and supplier.

Broker Fee

A fee charged by a leasing broker for arranging a finance agreement. Some brokers charge a separate fee, whilst others receive commission from the finance provider.

Budget

A budget is a list of expenses allocated for spending.

Business Contract Hire (BCH)

A leasing agreement designed for businesses, allowing VAT-registered companies to reclaim some or all of the VAT, depending on how the vehicle is used.

BVRLA

British Vehicle Rental and Leasing Association. As a Member you will be able to access detailed information and some of the many services especially developed to help you manage your business more effectively and efficiently. It is also the governing body of the leasing and rental industry assisting not only its members but the consumers too.

CAP

CAP (part of Emap Ltd) provides the motor industry with used and future residual value data, new vehicle data, technical information and asset management support systems.

CAP ID

A CAP ID is a unique vehicle code/ identifying number provided by CAP; an industry leading vehicle data provider.

Capital

Money or valuable assets which if invested can grow in value or generate an income.

Capital Allowances

Tax relief available to businesses purchasing qualifying assets, including certain vehicles.

Car allowance

Payment made by a company to an employee in lieu of a company car. Normally paid monthly through PAYE and is broadly equivalent to the leasing cost of the car.

CCA

Consumer Credit Act. Enacted in 1974 to protect individuals, unincorporated companies (i.e. not limited) and partnerships where credit does not exceed £25,000. (Referred to as a regulated agreement).

CCJ

A County Court Judgement recorded against a person or organisation e.g. for non-payment of debt.

Cherished Plates

Often known as a personalised number plate. Different plates can be assigned to different vehicles (often specific to the individual driver or organisation).

City car

A city car is a small, moderately powered vehicle.

Class

The class of a vehicle defines its main use, status or style i.e 4x4 or convertible.

CO2

Abbreviation for Carbon Dioxide. The amount of CO2 a car emits in g/km is used to calculate how much company car tax and Road fund License it attracts.

Collection Appointment

The agreed date and time when the finance company collects the leased vehicle.

Collections

Collection is the term used when your contracted vehicle is collected from you and returned to the funder.

Commission

This is the fee payable to a broker to cover the cost of executing and settling a transaction or sale.

Company Car Tax

The tax paid by employees using a company vehicle for private use, based largely on Benefit in Kind (BIK).

Consumer Duty

The FCA's regulatory framework requiring firms to deliver good outcomes for retail customers.

Contract

This is the agreement between you and the finance house which stipulates the terms of the agreement.

Contract Hire

A funding method where an organisation leases a vehicle for a specified period and makes regular monthly payments. The finance company retains ownership of the vehicle. At the end of the contract period, the vehicle is returned to the finance company and disposed of and the finance company is responsible for the associated risks in depreciation etc.

Contract Mileage

An agreed annual mileage over the term of the contract.

Contract Months

An agreed period of time that the contract will be in effect.

Contract Purchase

An organisation leases a vehicle for a specified period and makes regular monthly payments. The organisation / driver has the ability to purchase the car at the end of the contract for a predetermined amount i.e. balloon figure / guaranteed value.

Contract Types

This determines the kind of agreement entered into between a customer and a finance house.

Convertible

Convertibles are vehicles with retracting roofs. With doors commonly reduced from 4 to 2.

County Court Judgement

See "CCJ".

Coupe

Coupes are often hard-topped sports cars or sporty variants. With doors commonly reduced from 4 to 2.

Credit Broker

A business authorised to introduce customers to finance providers but which does not itself provide the finance.

Credit Score

A Point system used by finance companies in assessing clients Credit Rating to establish affordability.

Credit Search

A credit check carried out by a finance company to check your past and current credit record. This will also provide details of your Credit Score.

Creditor

The counterparty of a debtor.

Crew Van

A van designed to carry both passengers and cargo, typically with a second row of seats.

Daily Rental

A short term rental of a vehicle. Daily Rental is often used on a day to day basis as and when required.

Damage

Damage describes imperfections resulting from accident / misuse.

Dash Cam

A camera installed in a vehicle to record journeys for security or insurance purposes.

DC Rapid Charging

Direct Current charging that allows an electric vehicle's battery to recharge much faster than standard AC charging.

Dealer

See "Supplying Dealer".

Debtor

Is an entity that owes a debt to someone else. The entity may be an individual, a firm, a government or a company.

Decline

Refusal by a finance company to provide funding due to Credit Search and Credit Score results.

Delivery Note

A document recording the delivery of a vehicle to a customer / organisation. The customer is required to sign this to confirm condition and mileage.

Dependants

People who are financially dependent upon another person.

Deposit

The amount of money paid upfront towards the contract. See "Initial Rental".

Depreciation

The loss in value of a vehicle over the life of the contract. This is the difference between the original purchase price and the sale price at the end of contract.

Derivative

The derivative of a vehicle is its unique identifying type i.e 1.9 Tdi SE Auto / 1.7 Cdti Style.

Diesel

Diesel or diesel fuel in general terms is any fuel used in diesel engines. The most common is a specific fractional distillate of petroleum fuel oil.

Direct Debit Mandate

Direct debit is a payment system that allows an organisation to instruct their bank to collect varying amounts directly from the customer. A signed Direct Debit Mandate is the customer's instruction to allow this transfer to take place.

Directors Guarantee

During the underwriting process a finance company can call on Directors to give their personal guarantee. This will in some cases satisfy the finance company resulting in approval of the lend.

Documentation Fee

This is a one off fee, often charged by finance companies for the administration and set-up of an agreement. The fee is generally payable on signing of the Finance Documents.

Documents

Documents are legal agreements between two parties detailing the terms of the contract.

Driving Licence

An official identification document giving permission to allow the holder to drive a vehicle. Further permissions are required to drive vehicles such as HGV's.

Due to Dealer

Due to dealer is a term used by the supplying dealer as an estimated date that the vehicle is due into the dealership.

Early Termination

Early Termination is instructing the funder to end your lease prematurely or before the scheduled End of Contract date. The lessee will typically be required to pay an early termination charge as detailed in their contract.

Electric Car Grant

Any government incentive or support scheme available for electric vehicle purchases or charging infrastructure. (Availability varies over time.)

Electric Vehicle (EV)

A vehicle powered entirely by electricity stored in rechargeable batteries.

Employee Benefits

Benefits provided by an employer generally as an incentive, such as a company car allowance and an employee pension scheme.

End of Contract (EOC)

When your vehicle contract is coming to an end, you have a range of options varying from funder to funder:
Renew: return and replace the vehicle by taking a new contract.
Extend: extend the agreement on the existing vehicle for a further period.
Purchase: we can negotiate on your behalf so that you, your family, friends or colleagues can purchase the vehicle at the End of Contract.
Collection: we will arrange to collect your vehicle at the End of Contract.

End-of-Lease Inspection

An inspection carried out before or during vehicle collection to assess mileage and condition.

Equity

The value of the vehicle less any outstanding finance.

Estate

An Estate vehicle (sometimes known as a Touring) is generally more spacious behind the rear seats and consists of 5 doors.

Excess Damage

Damage beyond what is considered fair wear and tear, which may result in additional charges.

Excess Mileage Charge

The amount of money per mile to be paid when the contract mileage has been exceeded.

Excess Wear and Tear Charge

An additional charge levied by the finance company to rectify damage.

Extension

Extend the agreement on the existing vehicle for a further period.

Factory Fitted Options

Factory fitted options are upgrades that can be made at extra cost to a standard vehicle specification; these upgrades are applied during the manufacturing process.

Factory Order

A vehicle built specifically to a customer's chosen specification rather than supplied from stock.

Fair Wear and Tear

The level of vehicle deterioration considered acceptable at the end of a lease. Most finance companies follow the BVRLA Fair Wear & Tear Guidelines.

FCA (Financial Conduct Authority)

The UK regulator responsible for overseeing financial services firms, including many vehicle leasing brokers and finance providers.

Finance House

The company providing the finance and owning the vehicle throughout the lease.

Finance Rental

The rental element, which covers the finance part of the rental only.

Financial Ombudsman Service (FOS)

The independent body that resolves complaints between consumers and regulated financial businesses.

Financial Service Authority

This is an independent governmental body given statutory powers by the Financial Services & Markets Act 2000. It regulates the financial services industry in the UK.

First Registration Fee

Designed to cover the administrative costs associated with registration of the vehicle throughout its life. The government levies this on all new vehicles.

First Year Allowance (FYA)

Enhanced tax relief available for qualifying low-emission business vehicles.

Fleet

Fleet is the term used to describe a group of vehicles.

FOC

Free Of Charge — something for nothing!

Formal extension

Also known as Secondary Period. When a customer enters into an extended contract for a set period of time. Generally this type of extension is for 3 months or more.

Franchise

Authorisation from one organisation to another enabling the sale of goods and services generally in a specific geographical location. In some cases there are specific guidelines that must be followed by the parent organisation.

Fuel

A substance that can be consumed by a vehicle to produce energy.

Fuel Benefit Charge

An additional tax charge applied where an employer provides fuel for private use in a company car.

Funder

Another name for the Finance company. The funder is used to provide funds for the lease or hire of a vehicle.

Gear Box

The transmission of the vehicle.

GMFV / GFV

Guaranteed Minimum Future Value / Guaranteed Future Value.

Grey Fleet

Grey Fleet refers to any business miles driven by employees in their own vehicles that is claimed back at a fixed mileage rate by the employee.

Guarantor

A person, or organisation, that gives a guarantee / a surety that funds will be paid back to the funder.

Gross Vehicle Weight (GVW)

The maximum permitted operating weight of a vehicle, including passengers, cargo and fuel.

H1 / H2 / H3

Standard designations indicating a van's roof height.

Handbook

A comprehensive guide to your vehicle, which contains information such as operating instructions and emergency contact information.

Hatchback

Hatchback is a vehicle which allows access from behind the vehicle generally by a single / top-hinged tailgate or large flip-up window. The vehicle commonly has two rows of seats, with the rear seat able to fold down to increase load space.

Hire

See "Lessee"

Hire Purchase

Hire Purchase combines elements of both a loan and a lease. Often a Hire Purchase agreement consists of an initial deposit followed by monthly payments over an agreed period of time. On conclusion of the monthly instalments you will own the vehicle outright.

Holding Company

A parent company of a group of companies, or a company that controls a subsidiary company.

Home Charge Point

A dedicated charging unit installed at a home to charge an electric vehicle safely and efficiently.

HPI

HPI refers to a database of information to ensure that the vehicle has no outstanding finance, has the correct number of registered keepers, its origin and confirms the actual mileage. Generally HPI is used prior to the sale or transfer of a vehicle.

HP

See "Hire Purchase"

Hybrid

A vehicle powered by both an internal combustion engine and an electric motor.

Hybrid Electric Vehicle (HEV)

A vehicle powered by both a petrol or diesel engine and an electric motor that cannot normally be plugged in to recharge.

In-Life Management

The administration and support provided throughout the duration of a lease, including changes to mileage, extensions and end-of-contract arrangements.

In Stock Vehicle

A vehicle already built and available for quicker delivery.

Income

Money received from employment (earned income) or investment (unearned income).

Initial Rental

Initial Rental is the deposit which makes up the first monthly payment.

Infotainment System

The vehicle's central display providing navigation, media, telephone and vehicle information.

Inspection

An examination or evaluation exercise of the vehicle. Generally carried out at the end of contract.

Insurance Group

The insurance group of a vehicle is a number (sometimes with a letter suffix) given to determine the cost of insurance. A vehicle's insurance group rating is determined by its cost, performance (0-60mph and top speed), parts costs and security levels.

Introducer

See "Broker"

IPT

Insurance Premium Tax payable on all Insurance premiums.

Jargon

Terminology / Language used within a specific industry

Joint Application

Finance applied for by more than one party.

Joint Venture

An association of companies or individuals to jointly explore finance or direct an initiative for mutual benefit. The different participants may have different shares in the joint venture, resulting in different levels of profit or loss.

Keyless Entry

A system that allows the driver to unlock and lock the vehicle without inserting a physical key, provided the key fob is within range.

Keyless Start

A push-button ignition system that allows the vehicle to be started without inserting a key into the ignition, provided the key fob is present inside the vehicle.

Key Replacement Cover

An optional maintenance or insurance product that covers the cost of replacing lost, stolen or damaged vehicle keys during the lease term.

L1 / L2 / L3

Standard designations indicating a van's wheelbase or body length.

Lead Time

The length of time advised when ordering a vehicle to estimate its due-to-dealer date and delivery date.

Lead Time Update

A revised estimate of the expected delivery date due to production or transport changes.

Lease

A type of agreement set over a specific period of time with regular payments.

Lease Extension

An agreement to continue leasing the vehicle beyond the original contract term, subject to the finance company's approval.

Leasee

The organisation or individual who has leased the vehicle.

Lesser

The lesser is the finance company leasing you the vehicle.

Licence

See "Driving Licence"

Liquidation

The winding up of a company no longer in a position to meet its debts or which otherwise wishes to cease trading. When the company's debts have been paid, any assets left over are eventually distributed among the shareholders.

Load Length

The usable length of a van's load area.

Make

The Make of the vehicle represents its Manufacturer i.e. Ford / Vauxhall.

Maintenance

An optional product which can be added to your contract. Should a lessee choose to opt for a Maintenance contract this would include; Servicing and Tyres.

Maintenance Package

An optional addition to a lease that covers routine servicing, maintenance and, in many cases, replacement tyres.

Manufacturer Warranty

A warranty offered on new vehicles by the manufacturer.

Max Power

The Maximum amount of power a vehicle's engine or motor can produce, normally measured in Horsepower (hp) or kilowatts (kW).

Mileage Allowance

The total amount of miles permitted as per terms of the contract.

Mileage Reconciliation

The calculation used to determine whether excess or unused contracted mileage applies.

Model

The Model represents the unique vehicle identifier i.e. Fiesta / Zafira.

Money Laundering

A process whereby money generated by criminal activity is run through a series of financial transactions to hide the original source.

Monthly Rental

Is the agreed monthly payment made to the finance company.

Mortgage

A loan to help you buy property, typically a house or flat. The property is used as security (collateral) for the loan until you have fully repaid it. There are usually established payment periods and interest rates (mortgage rates) applied.

MOT

The MOT scheme is monitored by the Vehicle and Operator Services Agency (VOSA). It is required by law that all vehicles which are more than three years old will need an MOT each year to ensure that they comply with at least the minimum road safety and environmental standards.

MPV

Is the term used to describe a multipurpose vehicle.

MRP

Manufacturers Recommended Price.

Multitronic

Multritronic is a stepless transmission.

National Insurance Number

A unique reference number used by HM Revenue & Customs to identify individuals for tax and National Insurance purposes. It may be requested during certain finance or employment-related vehicle applications.

Nearly New

A vehicle that may have been used for a short period of time but is not considered old.

Negative Equity

A situation where the outstanding finance on a vehicle exceeds its current market value.

New Vehicle

A vehicle that has not previously been registered to a retail customer and is supplied with the manufacturer's warranty.

No Claims Bonus (NCB)

A discount applied to a motor insurance premium for drivers who have not made a claim over a specified period.

Nominal

An unadjusted rate, value or change in value. This type of measure often reflects the current situation, such as the current price of a car, and doesn't make adjustments to reflect factors such as seasonality or inflation, which provide a more accurate measure in real terms.

On The Road

Cash price of the vehicle including registration fees etc.

Optional Extras

Additional features or equipment selected above the manufacturer's standard specification, usually at extra cost.

Order Confirmation

A document issued to confirm that a vehicle order has been accepted and is being processed.

Order Form

An Order Form is a signed agreement between the seller and the purchaser instructing the seller to proceed with the contract.

Outstanding Finance

The remaining balance owed on a finance agreement before it has been fully repaid or settled.

Owner

The legal owner of a leased vehicle, which is usually the finance company throughout the contract term.

P11d

The P11d value is used by both company car users when calculating their own company car taxation and the Inland Revenue for taxation purposes.

Panel Van

An enclosed commercial vehicle with a separate cargo area.

PCH

Personal Contract Hire is a funding method where an individual hires a vehicle for a specific period and makes regular monthly payments. The finance company retains ownership of the vehicle. At the end of the contract period, the vehicle is returned to the finance company and disposed of and the finance company is responsible for the associated risks in depreciation etc.

PCP

Personal Contract Purchase a funding method where an individual hires a vehicle for a specific period and makes regular monthly payments. The organisation / driver has the ability to purchase the car at the end of the contract for a predetermined amount i.e. balloon figure / guaranteed value.

PDI

Pre-Delivery Inspection is carried out before the delivery of any new vehicle to ensure that it meets the standards required by the Manufacturer.

Payment Profile

This determines the rentals and the frequency of payments made to the finance house.

Payload

The maximum weight a van can legally carry, excluding its own weight.

Peppercorn Rental

This type of rental is commonly used at the end of a Finance Lease Agreement and is often a small annual payment, to confirm use of the asset.

Personal Leasing

Personal Leasing is funding method where an individual leases a vehicle for a specific period and makes regular monthly payments.

Petrol

Petrol in general terms is fuel used in engines.

Plug-in Hybrid Electric Vehicle (PHEV)

A hybrid vehicle whose battery can be recharged using an external power source as well as the engine.

PLC

Public Limited Company. A Company whose obligations to creditors are limited by shares and who has fulfilled the legal requirements to attain public status (this does not necessarily mean their shares are tradable by the public).

PPM

Pence Per Mile. (See "Excess Mileage Charge".)

Pre-Registered Vehicle

A vehicle registered before being supplied to its first customer, often to enable discounted pricing.

Property Status

Property Status describes the type of agreement you have on your property e.g. freehold, leasehold or renting etc.

Proposal Form

A Proposal Form is an application form used to collect necessary information from an applicant so that they can be underwritten for finance.

Purchase Price

A Purchase Price is the price given by a finance company to purchase the vehicle at end of contract.

Qualified Acceptance

A finance approval that is subject to additional conditions, such as providing further documentation or a guarantor.

Quotation Expiry

The date after which a lease quotation may no longer be valid due to changes in vehicle pricing, interest rates or manufacturer support.

Quotation Validity

The period during which a vehicle leasing quotation remains available before pricing or availability may change.

Quote/Quotation

An estimate of the monthly finance cost of a vehicle based on such factors as the vehicle, contract type, contract length and mileage.

Range

The estimated distance an electric vehicle can travel on a full battery charge.

Range Anxiety

Concern about whether an electric vehicle has sufficient battery charge to reach its destination.

Regenerative Braking

A system that recovers energy during braking and stores it in the battery.

Referred

A finance company may refer your application for finance and request supporting information such as bank statements or utility bills. This information is used to support your Credit Search and Credit Score.

Referrer

See "Introducer"

Refurbishment Charges

Costs incurred to repair damage outside accepted fair wear and tear standards.

Registered Name

A unique name under which a company has been registered.

Registered Number

A registered identification number or RN is a number issued by Companies House also known as a Company Registration number.

Registration Number

The registration number is a unique seven character code given to every vehicle by the DVLA. The first two letters denote where in the country the vehicle was registered, the two numbers indicate when the vehicle was registered, and the last three letters are randomly generated to give unique identification.

Renewal

A Renewal is the replacement of your current contract.

Replacement Vehicle

A substitute vehicle provided on a like-for-like basis.

Residual Value

This is the figure used to predict the vehicles value after a period of time.

Return Condition

The condition in which the vehicle must be presented at the end of the agreement.

RFL

Vehicle excise duty (commonly referred to as "road fund licence" or "road tax").

Roadside Assistance

See "Breakdown Recovery".

Salary

Generally paid either once a month or weekly by bank transfer or cheque for duties served to an organisation.

Salary Sacrifice

An arrangement where an employee exchanges part of their gross salary in return for a leased vehicle and associated benefits.

Sale and Leaseback

Purchasing an asset / vehicle which is then funded and paid back on a monthly / quarterly basis.

Saloon

A Saloon is generally a 4 door vehicle with a separate boot compartment and often can sit up to 5 people.

Scheduled Delivery

An estimated date agreed by the delivery agents to deliver the vehicle.

Self-Regulation

The process by which financial services organisations became responsible for overseeing and policing their own industry under the Financial Services Act 1986, through a network of self-regulatory organisations (SROs).

Service / Servicing

A motor vehicle service is a series of maintenance procedures carried out at a set time / interval or after the vehicle has travelled a certain distance. The service intervals are specified by the vehicle manufacturer in a service schedule and some vehicles display the due date for the next service electronically on the instrument panel. The completed services are usually recorded in a service book which is 'rubber stamped' by the service centre upon completion of each service.

Settlement Figure

The amount required to settle a finance agreement before the scheduled end of the contract.

Spare Key

An additional key provided with the vehicle.

State of Charge (SoC)

The percentage of battery capacity currently available.

Status

Status is associated with standard contract-hire terms; non-status applies to new start companies, adverse credit and/or limited accounting information.

Supplying Dealer

A Supplying Dealer is a business that sells new and used cars. Usually open to the general public and often has a forecourt displaying current vehicles on sale.

Tax Efficient Vehicle

A vehicle offering lower taxation due to its low emissions or electric powertrain.

Tax Year

The Tax Year runs from the 6th of April one year to the 5th of April the following year. The Tax Year is governed by the Inland Revenue.

Telematics

Technology that remotely records vehicle location, usage and driving data.

Term

Term is the phrase used to describe the contract length.

Terminal Pause

A two month lapse at the end of an agreement before the vehicle is either returned or acquired.

Termination

Termination generally refers to the Contract End date. Termination of a contract can either be at the natural end of the contract or throughout the duration of the contract by terminating in advance.

Tow Bar

A device fitted to enable towing of trailers or caravans. Its availability may affect leasing terms.

Tracker

A system added to high value vehicles in order to prevent and protect them from thieves and criminal damage.

Transmission

Also known as a 'Gear Box'.

Treating Customers Fairly (TCF)

An FCA principle requiring firms to put customers' interests at the heart of their business.

Turnover

The value of sales of an organisation over a period of time.

ULEZ

Ultra Low Emission Zone. An area where vehicles that do not meet specified emissions standards may be charged to enter.

Underwriting

Underwriting refers to the process that funders use to run a series of checks and assess the eligibility of a customer to receive funding.

Unregulated Agreement

A finance agreement that falls outside the scope of the Consumer Credit Act due to the customer type or the nature of the agreement.

Usage Charges

Additional costs that may become payable during or at the end of a lease, such as excess mileage or damage charges.

Used Vehicle Leasing

The leasing of a previously registered vehicle rather than a brand-new vehicle, typically at a lower monthly rental.

V5

The V5 registration document is issued by the DVLA. It gives the name and address of a vehicle's current owner as well as the last two registered keepers. It also lists the car's colour, make, model, engine number, and vehicle identification number.

VAT

Value Added Tax, or VAT, is a tax charged on most business-to-business and business-to-consumer transactions in the UK. VAT is also charged on goods, and some services, imported from places outside the European Union (EU) and on goods and some services coming into the UK from other EU countries. VAT is charged to a buyer by a VAT-registered seller. It is reclaimed by a VAT-registered buyer after goods and services are purchased.

Vehicle Excise Duty (VED)

The official name for UK road tax.

Vehicle on Hire Certificate

See "VE103"

Vehicle Tracking

The process of monitoring a vehicle's progress from factory through to delivery.

VE103

A VE103 is a certificate giving permission to travel abroad. This documentation is required when any rental or leased vehicle is taken out of the country.

VIN (Vehicle Identification Number)

A unique 17-character number used to identify a specific vehicle.

VOSA

Vehicle & Operator Services Agency. The body ensuring safer roads and vehicle conditions.

Warranty

The manufacturer's or provider's guarantee covering defects in materials or workmanship for a specified period or mileage.

Wear and Tear

The deterioration expected through normal everyday use of a vehicle. Fair wear and tear is assessed using industry guidelines at the end of the lease.

Wheelbase

The distance between the centre of the front axle and the centre of the rear axle, often used to distinguish different vehicle variants.

Whole Life Cost

The total cost accounting for depreciation, servicing, fuel and other related costs incurred when running a vehicle for a set period of time.

WLTP

Worldwide Harmonised Light Vehicle Test Procedure. The current testing standard used to measure fuel consumption, CO₂ emissions and electric driving range.

Write-off

A vehicle that has been declared uneconomical or unsafe to repair by an insurer following damage.

xDrive

BMW's intelligent four-wheel drive system, designed to improve traction and handling in varying road conditions.

Xenon Headlights

High-intensity discharge (HID) headlights that provide brighter illumination than conventional halogen lights.

XLWB (Extra Long Wheelbase)

A version of a van or vehicle with an extended wheelbase, providing increased load or passenger space.

Year of Manufacture

The calendar year in which a vehicle was built, which may differ from its first registration date.

Years

Term used for the length of your contract.

Yield

The financial return generated from an asset or investment. In vehicle leasing, funders may consider expected yield when pricing lease agreements.

Zero Deposit Lease

A lease agreement that requires no initial deposit beyond the first monthly rental, subject to finance approval.

Zero Emission Vehicle (ZEV)

A vehicle that produces no exhaust emissions during operation, such as a fully electric vehicle.

Zero Tailpipe Emissions

A term used to describe vehicles that produce no emissions from the exhaust while being driven, typically battery electric vehicles.