Hilton Garage's Glossary of Car Finance: A-D

Car finance agreements can be a great option, but it is important that you know what you are getting into, which isn’t always easy with all of the jargon involved.

At Hilton Garage, we try to make car finance simple, so we have created a glossary to explain some of the most baffling terminology.

Annual Mileage

Annual mileage caps may be involved with some types of finance agreement. This means that before the agreement starts, an estimation of the miles per year you will cover will be made, while the vehicle is still officially the property of the finance provider, and if you exceed this, you will incur an additional charge.

APR

Annual Percentage Rate refers to the total amount you will pay on top of your finance repayments. You will see this on all finance quotes.

Balloon Payment

At the end of a PCP agreement, you will be given two options: you can either return the vehicle, or keep it. If you choose to do the latter, you will have to make a substantial payment, known as a balloon payment.

Credit Check

When you apply for finance, lenders will conduct a credit check to ensure that you are likely to repay what is borrowed. They will review your current your credit history to establish how reliable you have been at paying back loans in the past.

Deposit

A deposit is the amount that you will put down on a car when you purchase it. It will be taken off the total cost of the vehicle, so that you will only have to repay the remaining cost of the vehicle.

Depreciation

As a car gets older, its mileage increases and it incurs wear and tear, its value will decrease, which is known as vehicle depreciation.

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