Hilton Garage’s Car Finance Glossary: N-Z

The final instalment of Hilton Garage’s Car Finance Glossary takes you from N to Z, explaining some of the most confusing words and phrases that you may encounter when you apply for car finance.

Be sure to read our A to D and E to M sections too!

Negative Equity

If you have read the second part of our Car Finance Glossary, you will know that equity is the difference between the total value of your car and the amount you owe to fulfil your agreement. If your vehicle is worth more than you owe, this is positive equity, whereas, if your car is worth less than what you owe, this is negative equity. So, if you owe £10,000, but the car is only worth £8,000, you will have £2,000 of negative equity, which you may be able to put towards a new finance agreement.

Part Exchange

At Hilton Garage, we accept part exchanges. This means that when you purchase a vehicle from us, you will be able to trade in your current car and get money off your new one. The way it works is that we will give you a valuation to tell you how much your car is worth, and this amount will be deducted from the price of the new vehicle you wish to purchase.

Personal Contract Purchase

Personal contract purchase (PCP) finance is a popular type of agreement, which allows you to put down a deposit and make monthly payments, which will cover the depreciation of the car. At the end of the agreement, you will be given the choice of making a large final payment and keeping the car or returning it.

Residual Value

Residual value refers to the amount a car will be worth at a specific point in the future. Finance providers will use this to figure out a vehicle’s value at the end of a contract.

Term

The period of time you will have to make repayments, typically between 12 and 60 months.

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