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Glossary

Annual Mileage:
When leasing a vehicle, the deal is partially calculated based on how many miles the driver intends to travel yearly. The annual mileage normally agreed on your leasing contract can be from 5,000 miles to 50,000 miles. If the driver exceeds the agreed mileage, it is likely for an additional charge to occur.

Benefit In Kind (BIK):
Benefit In Kind is a taxable benefit received by employees in addition to their salaries such as a company car and fuel allowance.

Business Contract Hire:
Business Contract Hire is eligible for those customers who qualify as any of the following: self-employed, sole trader, LLP, partnership, limited company or business owner. Most Business Contract Hire customers are required to have been trading for at least a year.

Contact Hire:
In Contract hire, a company or individual hires and drives the car for an agreed period of time. The customer pays regular monthly payments as well as an initial rental payment. At the end of the contract term/period the vehicle is returned back to the company and you can negotiate delivery of a new replacement model. The car is never owned by the customer.

Contract Term:
This is the length of the contract. Early cancellation of the contract could incur charges.

CO2 Emissions:
The CO2 emissions from a vehicle effects the BIK value and can affect the amount of person tax payable.

Excess Mileage Charge:
If you have exceeded the agreed contract mileage then you would normally be charged for any excess mileage you do. This normally comes in PPM (Pence Per mile).

Finance Documentation Fee:
The Finance documentation fee is charged by the finance company who provides the finance for the vehicle. This fee will be collected separately.

Finance Lease:
Finance lease/leasing is a form of vehicle leasing contract which is normally offered to business persons. Compared to Contract Hire agreements, finance leases offer a 100% tax deduction to qualifying businesses. There is no option to purchase the vehicle but a possibility to continue paying to operate it.

Gap Insurance:
In the case of the car being stolen, a fire or any accidental damage; the Gap Insurance covers any additional cost that your insurer won’t pay out for. GAP insurance covers the difference between the cash value of the vehicle and what you still owe on the lease contract.

Hire Purchase (HP):
Hire purchase combines elements of both a loan and a lease which allows the customer to own the vehicle at the end of the agreement with simple regular payments and no mileage restrictions.

Initial Payment:
This is the first payment which the customer pays for the leased vehicle. It is normally calculated as 3, 6 or 9 months of your monthly rental. A higher initial payment will reduce the amount of monthly rental payments.

NCAP Overall Rating:
The NCAP rating is a safety ranking system ranging from 1 to 5. The higher the rating the better.

Outright Purchase:
An outright purchase is a straightforward purchase where the payment is paid in full.

P11D:
The P11D value of the vehicle is used to calculate the amount of company car tax you may be required to pay.

Personal Contract Hire:
Personal contract hire, also known as personal leasing works in the same way as business leasing but the price includes VAT. It is designed specifically for personal customers.

Personal Contract Purchase (PCP):
Personal Contract Purchase (PCP) is similar to a Hire Purchase agreement as you will usually pay an initial deposit, followed by monthly instalments. PCP allows the customer to own the vehicle at the end of the agreement.

Processing Fee:
The processing fee is charged by ourselves to cover the administration for setting up the contract. This fee will be collected separately.

Rental Profile:
The rental profile typically dictates the number of monthly rentals required, consisting of one initial rental followed by a number of monthly retails. I.e. 3+35 would be a 3 years contract, where the initial rental would be 3 times the standard monthly rental.

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