Hilton Garage's Car Finance Glossary: E-M

It easy to become baffled by the terminology used in car finance agreements, which is why Hilton Garage have put together a handy glossary to clear things up.

This is the second part of our car finance glossary. You can find out about everything from annual mileage to depreciation here!

Equity

The term equity refers to the difference between your car’s total value and the amount you owe your finance provider, so if your vehicle is worth £8,000, and you still owe £5,000, you will have £3,000 of equity.

FCA

The Financial Conduct Authority regulates all credit agreements for British consumers. Hilton Garage is authorised by the FCA to help our customers to secure finance deals.

Fixed-Rate Interest

This means that the interest rate will stay the same for the duration of your finance agreement, with no fluctuation.

GAP Insurance

GAP stands for guaranteed asset protection. This type of insurance will pay out beyond your car insurance if your vehicle is stolen or written off, covering any finance costs you are still liable to pay.

Guaranteed Future Value

When you sign up for a PCP agreement, your finance provider will give a calculated estimation of the minimum amount they believe the vehicle will be worth at the end of the contract term. This is known as the Guaranteed Future Value (GFV). This figure will determine the cost of your monthly repayments.

Hire Purchase

Hire Purchase (HP) finance agreements allow you to divide the cost of your car, by making an initial deposit, followed by regular monthly repayments. Once you have made the final payment, you become the legal owner of the car.

Joint Application

A joint application is done by two individuals. As two sets of credit details are being used rather than just one, this can sometimes strengthen an application. Both people are responsible for making the repayments.

Find the best car finance deals in Derby at Hilton Garage!