Car Finance
The car finance market is loaded with specialist terms. Some of these you may know, others you may not.
APR stands for Annual Percentage Rate. This is the way to calculate the cost of your car finance each year.
A balloon payment often occurs on PCP (Personal Contract Purchase) car finance. This is the final payment needed to secure full ownership of the vehicle.
Depreciation is the amount of value your car has lost between two points in time, normally the point you have taken our car finance to buy the vehicle, to the point you have sold your vehicle.
Equity is the difference in value between the car and the sum still left to pay on the loan.
GAP (Guaranteed Asset Protection) insures you in case of write off. It usually pays the difference between your insurance payout and the total car finance value still left to pay on your loan.
Residual value is the value of your car after depreciation, condition damage and mileage are taken into account.
Variable rate means that the interest rate of your car finance could vary throughout the term of the loan.
APR stands for Annual Percentage Rate. This is the way to calculate the cost of your car finance each year.
A balloon payment often occurs on PCP (Personal Contract Purchase) car finance. This is the final payment needed to secure full ownership of the vehicle.
Depreciation is the amount of value your car has lost between two points in time, normally the point you have taken our car finance to buy the vehicle, to the point you have sold your vehicle.
Equity is the difference in value between the car and the sum still left to pay on the loan.
GAP (Guaranteed Asset Protection) insures you in case of write off. It usually pays the difference between your insurance payout and the total car finance value still left to pay on your loan.
Residual value is the value of your car after depreciation, condition damage and mileage are taken into account.
Variable rate means that the interest rate of your car finance could vary throughout the term of the loan.