Glossary

AFRL — Certificate of Registration: The “logbook” that proves who the registered keeper of the vehicle is.

APR — Annual Percentage Rate: The total cost of borrowing money over a year, including interest and any mandatory fees. It provides a standard way to compare the cost of different loans.

ATO — Authority-To-Order: A formal confirmation or permission within a company structure allowing an individual to proceed with a vehicle order.

BCH — Business Contract Hire: A long-term rental agreement for companies. The business pays a fixed monthly fee to use the vehicle and returns it at the end of the term.

BLP — Basic List Price: The cost of the car before VAT, road tax (VED), and registration fees.

BVRLA — British Vehicle Rental and Leasing Association: The UK trade body for companies engaged in vehicle rental, leasing, and fleet management. They set industry standards and codes of conduct.

BiK — Benefit in Kind: A tax on employees who receive “perks” from their employer that aren’t included in their salary—most commonly used regarding company cars.

CHNM — Contract Hire Non-Maintained: A lease where the monthly price covers only the vehicle use. The driver is responsible for all servicing, repairs, and tyre replacements.

CHWM — Contract Hire With Maintenance: A lease where the monthly fee includes a service package covering routine maintenance, wear-and-tear items, and often breakdown cover.

COMMS — Commission: The fee paid to the broker or dealer for arranging the finance.

CP — Contract Purchase: A finance plan (like PCP) where you pay monthly with the option to buy the car at the end.

DLR — Dealer: Seller of the vehicle (not the finance broker you are dealing with).

DPF — Diesel Particle Filter: A device fitted to diesel exhausts to capture and store soot particles to reduce emissions.

EV — Electric Vehicle: A vehicle powered entirely by electricity stored in rechargeable batteries, with no internal combustion engine.

FCA — Financial Conduct Authority: The regulatory body in the UK that oversees financial markets and firms to ensure they operate fairly and transparently.

FL — Finance Lease: A commercial net-lease where the vehicle appears on the company’s balance sheet. The business usually sells the vehicle to a third party at the end and keeps a percentage of the proceeds.

FOS — Financial Ombudsman Service: An independent body that settles disputes between UK consumers and financial businesses.

FW&T — Fair Wear and Tear: The industry standard for what constitutes “normal” ageing of a vehicle. Minor stone chips are usually fine; a giant dent in the door is not.

GAP — Guaranteed Asset Protection: Insurance that covers the “gap” between the amount an insurer pays out if a car is totalled and the amount still owed on the finance agreement (protecting against depreciation and shortfalls).

GFV — Guaranteed Future Value: A promise from the finance company that the car will be worth at least a specific amount at the end of the deal, protecting you against depreciation.

HP — Hire Purchase: A straightforward path to ownership. You pay a deposit and monthly instalments; once the final payment is made, you own the car.

IP / IR — Initial Payment / Initial Rental: Your “down payment”; In leasing, this is often expressed as a multiple of the monthly cost (e.g., “6-month initial rental”).

LWB — Long Wheelbase: Refers to the distance between the front and rear wheels. LWB models offer more internal space or cargo room.

MHEV — Mild Hybrid Electric Vehicle: Uses a small electric motor to assist the engine and improve efficiency, but it cannot drive on electricity alone and does not plug in.

MLA — Master Lease Agreement: A primary contract that governs the overarching relationship between a lessor and lessee, allowing for multiple vehicles to be added under the same general terms.

MOT — Ministry of Transport: An annual test of vehicle safety, roadworthiness, and exhaust emissions required in the UK for most vehicles over three years old.

MPA — Miles Per Annum: The total distance a vehicle is contracted to travel in a single year.

OTRP — On The Road Price: The total price you pay to actually drive it away, including VAT, first-year road tax, and registration.

OZEV — Office for Zero Emission Vehicles: A government body that often provides grants or incentives for electric vehicles.

PCH — Personal Contract Hire: Similar to BCH, but for individuals. You “rent” the car for a set period and mileage, then hand it back. You never own the vehicle.

PCP — Personal Contract Purchase: A flexible finance plan where you pay monthly instalments. At the end, you can either return the car, trade it in, or pay a “balloon payment” to own it.

PDI — Pre-Delivery Inspection: The final check performed by a dealer on a new vehicle to ensure it is safe, functional, and meets all manufacturer standards before it is handed over to the customer.

PF — Processing Fee: An admin charge for setting up the contract.

PHEV — Plug-In Hybrid Electric Vehicle: Features both an electric motor and a combustion engine. It can be plugged in to charge the battery for short electric-only trips.

PPF — Petrol Particle Filter: The petrol equivalent of a DPF, designed to minimise particulate matter emissions from gasoline engines.

PPM — Pence Per Mile / Excess Pence Per Mile: The cost calculated for every single mile driven. If you go over your agreed annual mileage, you’ll be charged a specific rate (e.g., 10p) for every extra mile driven.

PROP — Proposal / Finance Application: The formal request you submit to a lender to see if they’ll fund your vehicle.

RFL / VED — Road Fund Licence / Vehicle Excise Duty: Commonly known as “road tax”, this is the annual tax paid to the government to operate a vehicle on public roads.

RV — Residual Value: The estimated worth of the car at the end of the term.

SLA — Service Level Agreement: A contract between a service provider and a customer that defines the level of service expected (e.g., response times or repair turnarounds).

SWB — Short Wheelbase: Refers to the distance between the front and rear wheels. SWB models offer less internal space or cargo room.

ULEV — Ultra Low Emission Vehicle: A vehicle that emits less than 75g/km of CO2.

XSM — Excess Mileage: If you go over your agreed annual mileage, you’ll be charged a specific rate (e.g., 10p) for every extra mile driven.