Fair wear and tear
Road fund licence
This is another word for ‘lease’. That’s right, ‘contract hire’ and ‘lease’ are exactly the same thing!
This is the fee a broker/finance company charge to set up your lease agreement.
BCH stands for ‘Business Contract Hire’. You guessed it, an acronym for business lease. Learn more about BCH here.
PCH stands for ‘Personal Contract Hire’. Like the above, an acronym for personal lease. Learn more about PCH here.
This is a company that obtains the best deals and sets up the agreement between the customer and the finance provider. Often enough, brokers have access to exclusive deals and negotiate discounts of their own so you end up getting a better deal than if you went into a dealership.
The ‘British Vehicle Rental and Leasing Association’. These are the guys who created the fair wear and tear guide, used by most finance providers to set out how a car should be returned at the end of the lease. They also make sure all members trade under a fair code of conduct.
This is the contract length.
This is the finance company who own the car and the financial agreement is with.
This is an optional product you can add to your lease agreement for an added layer of protection. Learn more about GAP here.
A payment profile is used to calculate the deposit on a lease. Learn more about payment profiles here.
These all mean the same thing and refer the first payment due on your lease.
Unlike the word deposit suggests, you do not get it back and it is part of the cost of your lease.
This is how much a car loses in value over a certain period of time. ‘The car depreciated by £5,000 over 12 months’, for example.
The amount of miles you go over on your lease allowance is called excess mileage.
This is what’s referred to when deciding if damage on the car is fair and likely to happen with general usage of the vehicle, or if the damage is chargeable, like if the car has been reversed into something and has a dent!
This is the time it’ll take for the car to arrive at the dealership. ‘The lead time is 12 weeks’ for example.
‘Miles per gallon’ – how many miles the car should travel per gallon of fuel.
This is how much the car is worth at the end of a certain period. ‘The residual value of this car will be £15,000 after the 3 year lease’ for example.
This is another name for road tax!
‘Value added tax’ is currently at a rate of 20% and payable on top of all business lease prices. Lovely.
‘Break Horsepower’ or ‘Pferdestrke’ (which means ‘horse strength’ to you and me) is a measure of power available at the shaft of an engine.