A - Z of Car Leasing

Business Leasing

- Business leasing are leasing options that are set up specifically for businesses. They may have tax benefits depending on the type of agreement you decide on. Business leasing prices will usually be displayed excluding VAT.

BVRLA

- The British Vehicle Rental and Leasing Association operate a fleet of over 2.6 million cars and vans. They also provide the industry standard when determining a fair level of wear and tear on a vehicle being returned from a leasing period.

Business Contract Hire (BCH)

- BCH allows businesses to lease cars for a set period of time. There will be a mileage allowance on the vehicle and the business will not have the option to purchase the vehicle at the end of the contract.

Balloon Payment

- If you have the ability to purchase the vehicle at the end of the agreement it will often be referred to as a balloon payment.

Bankruptcy

- It is highly unlikely that you will be accepted for a contract hire or leasing agreement if you have been bankrupt in the past 5 years.

Benefit in Kind

- BIK is worked out to help a customer report to the tax office the amount of tax due to be paid on a vehicle being leased. The tax amount will be worked out by calculating the vehicle list price and the VAT element.

Broker

- A broker will act as an intermediary to help you find the best possible price for your agreement. They may also help you to source the vehicle that you want.

Contract Hire & Leasing

- Car leasing is often referred to as contract hire and leasing due to the variety of different contracts that can be entered into.

Car Leasing Plus

- Car Leasing Plus offer the best online journey for customers looking for either business or personal leasing. We are the only leasing company that offer instant online decisions. We also provide real time quotes using our unique car calculators.

Credit Search

- In order to apply for a contract hire and leasing agreement you will be credit searched. Credit reference agencies keep a record of all of your credit instances.

Calculators

- Car Leasing Plus offer a range of calculators to help you understand your affordability and the amount you are likely to pay each month.

Contract

- Contracts are required to complete the leasing agreement. The contract will be legally binding.

Credit Facility

- A business may require a credit facility to draw down funds as and when required. This can help companies that require a fleet of vehicles over a period of time so they do not need to make individual applications for each of their vehicles.

CAP

- CAP Motor Research Ltd (CAP) provides the vehicle information for the new vehicle listed on the Car Leasing Plus website.

CCA

- The Consumer Credit Act (CCA) protects individuals from businesses that may lend money or arrange credit agreements without following the OFT guidelines.

Co2

- Carbon Dioxide is emitted from a vehicle. The amount of Co2 that a vehicle emits will determine the car tax and road fund license costs.

Delivery

- Car Leasing Plus will arrange the delivery of your vehicle either to your home or place of work.

Deposit

- Please see ‘advanced rentals’

Direct Debit

- You can pay your monthly cost by direct debit. Direct debit is a standing order which will be deducted from your bank account on a set day either monthly, quarterly or annually depending on your agreement.

DVLA

- The Driver and Vehicle Licensing Agency (DVLA) are responsible for keeping the database of UK drivers up to date. They issue driving licenses and road tax (road fund licenses).

Dealership

- You will buy your new car from a car dealership. New cars will come from franchised dealers whereas used cars may be provided from a network of national dealerships that Car Leasing Plus maintains.

Documentation

- You will be required to provide copies of your documents as proof of ID and earnings in some occasions. You will also be required to complete leasing documents when you sign the agreement.

Discounts

- Car Leasing Plus has negotiated excellent discounts from manufacturers and dealers to ensure we can provide you with the industries leading prices.

Decline

- Unfortunately customers with poor credit ratings may be declined for finance if we are unable to find a lender who will fund them.

Depreciation

- Cars tend to depreciate over time and the amount they depreciate by will vary depending on the make, model, derivative, age and mileage of the vehicle. Depreciation is taken into account when you are leasing a vehicle so cars that do not hold their value as well as others will be more expensive each month.

Director Guarantee

- Sometimes if you are looking for business leasing, but the company does not have a good credit history, you may be required to provide a directors guarantee. This means that the Director will be liable for the repayments & terms and conditions of the agreement should the company go in to liquidation.

Driving License

- You will only be able to lease a vehicle if you have a full UK driving license.

Extras

- Many cars will have ‘extras’ that can be added to the specification to enhance the vehicle. These are also known as ‘options’ ‘optional extras’ or ‘accessories’.

Equipment

- A car will have equipment either as standard or as optional extras.

Economy

- the economy is the distance a car will travel on a certain amount of fuel. This is often measured as miles per gallon (mpg)

Excess Mileage

- When you lease a vehicle you will be given a set mileage limit. If you go over this limit then you will be charged an agreed excess mileage fee for every mile over the set amount.

Extension

- Sometimes you may want to take a contract extension. This is sometimes available but will depend on the lender. The length you can extend a contract by will also vary.

Funding

- You will require funding in order to lease or purchase a vehicle. Funding will be provided by the lender that you agree the contract with.

Finance

- Finance is when somebody lends you money in order to purchase or lease something that you haven’t bought outright.

Fees

- In some instances you may be charged a document fee by the lender to complete the agreement and take delivery of the vehicle.

Fleet

- If you are a business and run multiple vehicles by using contract hire and leasing agreements it will often be referred to as a fleet. Car Leasing Plus also specialise in fleet management. Please contact us for further details.

Factory Fitted Options

- Most cars will allow you to buy different options to enhance the car. Most of these need to be fitted by the manufacturer and are known as factory fitted options.

FSA

- The Financial Services Authority (FSA) regulate all financial providers within the UK.

Franchise

- A franchise is a business that buys the right to use the name and products of a brand. Franchised dealerships will often provide the vehicles that are seen on Car Leasing Plus.

Funder

- A funder may also be known as a lender and will be the company that will provide you with the funds to purchase a vehicle.

Guarantor

- Sometimes in order to be offered a contact you may be required to have a guarantor who would take the responsibility of the payment should you stop paying the agreed monthly fee.

GAP

- Guaranteed Asset Protection (GAP) is a type of insurance that will protect you in the event of a vehicle being written off or stolen. GAP will cover any short fall that there may be in the price the insurance company values your car and the amount of finance remaining on the vehicle.

Hire Purchase (HP)

- Hire purchase is a type of funding that allows you to take ownership of a vehicle while you pay off the money borrowed (plus interest) to purchase the vehicle.

Home Owner

- A home owner is someone who owns a property that they live in. Home Owners are more likely to be accepted for contract hire and leasing as having a mortgage is a good way to increase you credit rating.

Handbook

- You will be given a hand book when you lease a vehicle that will give you the instruction of how to operate it. It will also provide you with a service guide which must be followed in order to keep within the terms of the contact.

HPI

- is a check that is undertaken to make sure the vehicle that you are buying has not been involved in an accident, doesn’t have outstanding finance and hasn’t been changed in any way that may not be obvious to a buyer. HPI checks are very common on used cars that may already have a history.

Income

- This is the amount of money that the customer earns. This will usually be asked for in a monthly amount and helps to prove affordability for a vehicle.

Insurance

- Every car on the road is legally required to be insured. If you take a car on contract hire and leasing it will be your responsibility to insure the car to comply with the law.

Instant Decision

- Car Leasing Plus is the only vehicle leasing website that can provide you with a real, instant online decision.

Initial Rental

- This is also known as advanced rental and is the amount deposit that you will pay for the vehicle. This is commonly 3 x the monthly rental cost of the vehicle. If you choose to put more money down as a deposit your monthly rate will reduce.

Joint Application

- Sometime you may prefer to do a joint application with a partner. This is where both names are used on the contract and both customers will be credit searched.

Key

- In most instances you will be provided with two keys when your new car is delivered.

Leasing

- Leasing is a broad term which cover a variety of contract hire and leasing options for both business and personal users.

Lease Purchase

- Lease Purchase agreements is where the customer pays an initial rental and then a series of monthly payments until the contract end date. At the end of the contract, the customer then takes ownership of the vehicle. The customer is liable for the full value of the vehicle and has no option to return it at the end of the agreement.

Lead Time

- This is the amount of time it will take between the order being processed and the car being delivered to the customer.

Lessee

- This is the customer who is leasing the vehicle over the set period of the agreement.

Maintenance

- For a fixed monthly fee you can choose to have you car maintained and serviced. Many businesses and personal users choose to have a car maintained so they do not incur further motoring costs throughout the year.

Mileage Allowance

- This is the amount of miles you are allowed to drive a leased car throughout a year. This amount will be agreed at the beginning of the contract and will go towards determining the monthly price. You will also be charged if you go over your mileage allowance (see excess mileage).

MRRP

- stands for the Manufacturers Recommended Retail Price which is the price the manufacturer recommend to dealership to sell the vehicle for.

Manufacturer Warranty

- All new cars come with a manufacturer’s warranty. Depending on the make of vehicle the length of the warranty will vary, as will the parts covered.

Mortgage

- If you have a mortgage (home owner) it is likely that you will have better credit than someone renting as you will have a proven track record with borrowing credit. However, missing mortgage payments will have the opposite effect and could lead to you being refused credit.

MOT

- All cars need to pass an MOT test each year except for new vehicles which do not need to be re-tested for 3 years after the purchase date.

New Cars

- Car Leasing Plus offers new or used cars that can be leased. New cars are usually purchased directly from the franchised dealership and can be ordered to the exact requirement of the customer.

Number Plate

- All cars are issued with number plates that act as unique identifiers for vehicles. They are then used by the authorities for a variety of reasons.

Non-maintained

- Contract hire and leasing vehicles can be maintained by the customer. These are known as non-maintained contracts. The maintenance and service schedules still have to be adhered to but it is the responsibility of the customer.

Order Form

- Once you have been accepted for finance and decided on the vehicle you want, you will have to complete an order form which we will then use to order your new vehicle.

- When you are ordering a new vehicle there will be many options that you can choose from. Some of these will be included in the cost; others will optional extras which you will have to pay for.

- Off balance sheet means that the car is not included as an asset as you do not own it. This may mean that you are given additional tax benefits.

- This stands for On The Road price. This is the price that you would have to pay for the vehicle which includes everything for it to be ready to drive on the road.

Personal Contract Hire (PCH)

- Is a leasing agreement for an individual which will hand the car back at the end of the agreement.

Personal Contract Purchase (PCP)

- is a leasing agreement which offers the individual the option to purchase the car at the end of the agreement for a pre-arranged price.

Performance

- All cars will all drive at different speeds, take different times to get to these speeds and handle differently. This is often referred to as the performance of the vehicle.

Personalised Number Plate

- Leasing vehicles can have personalised plates put onto the car for the length of the agreement. It is recommended that you obtain, in writing, confirmation that the leasing company will give the plate back to you at the end of the agreement.

Pre-registered vehicles

- This is where a car dealership or manufacturer registers vehicles and offers them at a subsidised price which is better than what they could offer them for new. The purchaser of a pre-registered vehicle will be listed as the second owner of the vehicle even though they would have taken delivery of effectively a new car with only the miles driven for the delivery on the clock.

Payments

- You will be required to make monthly payments for the vehicle as per the agreement you sign. There may also be a one off payments that has to be made before the agreement is complete.

Quote

- Before you sign a leasing agreement it is likely that you will require a number of quotes that provide you with a monthly cost for a vehicle. Car Leasing Plus makes it very simple to get quote by using our funding calculator.

Residual Value

- The residual value is the amount the car will be worth at the end of the leasing contract. When you get a leasing quote the lender will work out the residual value of the vehicle which will help them to determine the monthly cost.

Rental

- This is another way of describing the monthly cost that you will pay for the vehicle you lease.

Road Fund License (RFL)

- Every car owner has to pay a road fund license to the DVLA although new cars are exempt for the first 3 years. A Road Fund Licence is included in your agreement if you choose to contract hire a vehicle.

Settlement

- This is also known as early termination and refers to a customer who may need to settle the finance early. The settlement fee will vary depending on each individual circumstance.

Support

- The level of support refers to the discount level that Car Leasing Plus has negotiated with manufacturers to make sure we give you superb prices for leasing vehicles.

Servicing

- A car that has been leased will have to be serviced at specific intervals. This will be your responsibility and will be part of the leasing contract.

SMMT

- Society of Motor Manufacturers and Traders (SMMT) is a society that has been set up to help, support and promote the interest of the UK motoring industry.

Term

- This is the amount of months that the contract will run over.

Tax

- Also known as Road Fund License (RFL). This is the amount a driver is taxed each year to run a vehicle. Road Fund licence is included in your agreement if you choose to Contract hire a vehicle.

Termination

- This is a term that is used when somebody wants to cancel a contract earlier than the originally agreed date.

Used Cars

- These are car that have already had a previous owner(s) and may have been originally purchased on a finance agreement.

Underwriting

- If you make an application to Car Leasing Plus we may need to look into your details to ensure we can get you accepted with a lender. This is called underwriting.

Van Leasing

- this is a leasing option for someone that wants to lease a van. Commonly this will use a type of business leasing.

Value

- The value of a vehicle is the price that it will cost from new or the worth of the vehicle if it is used.

VOSA

- VOSA are the Vehicle & Operator Services Agency that are in charge of keeping the roads in the UK in good condition and safe for motorists.

V5

- the V5 is the document that proves who the owner of the vehicle is and is issued by the DVLA. If you lease a vehicle the leasing company will keep the V5 as the car will be registered in their name.

VAT

- stands for Value Added Tax and is the standard taxation that is applied to any goods which are sold. The prices on Car Leasing Plus may be including or excluding VAT depending on whether they were listed for business or personal users.

Warranty

- All new cars will come with a manufacturers warranty and used cars should come with a minimum of 3 months. The level of cover will depend on who supplied the warranty and should be carefully checked.

Years

- the term of the contract may also be called years and refers to the number of years that the contract will last for.