Hilton Garage’s Glossary of Car Finance: A–D

Car finance agreements can be a great option, but it’s important to fully understand what you’re signing up for, especially when the industry is filled with unfamiliar jargon. At Hilton Garage, we believe that buying a car should be simple and stress-free, no matter your credit history or budget. That’s why we’ve created a helpful car finance glossary to break down the most common car finance terms from A to D. Whether you're a first-time buyer or just brushing up, we’ve got you covered.

What Is Car Finance and How Can Hilton Garage Help?

Car finance is a way to spread the cost of a vehicle over time rather than paying the full price upfront. It’s a popular option at our car supermarket, helping many customers drive away in their perfect used car while keeping to a manageable monthly budget. At Hilton Garage, we work with a wide range of lenders and offer flexible finance options - even for customers with bad credit. With our soft credit checker, you can find out your eligibility for finance without affecting your credit score.

Hilton Garage’s Car Finance Glossary: A–D

Acceptance Fee

An acceptance fee is a charge that may be added when your car finance application is approved. It covers the cost of setting up your finance agreement.

Annual Mileage

This refers to how many miles you’re allowed to drive per year under certain finance agreements, particularly Personal Contract Purchase (PCP) or leasing. Go over the limit, and you’ll be charged extra at the end of the agreement.

APR (Annual Percentage Rate)

The APR shows the total cost of borrowing over the term of your agreement, including interest and any additional fees. It’s displayed on all finance quotes, so you can compare deals more easily.

Balloon Payment

At the end of a PCP agreement, you can either return the car or make a final lump-sum payment—the balloon payment—to keep it. This amount is agreed at the start of the contract and is often significant.

Bad Credit

Having bad credit means your credit history includes missed payments or defaults. But don’t worry—Hilton Garage has helped many customers with poor credit find affordable car finance. Visit our finance page to learn more.

Broker

A finance broker acts as a middleman between you and a lender, helping you find the best finance deal based on your circumstances.

Car Finance

Simply put, car finance is a way to fund your vehicle by paying for it in instalments, often with interest. It's one of the easiest ways to buy a car from a trusted car supermarket like Hilton Garage.

Car Lease

Leasing a car is similar to renting. You pay monthly to use the vehicle, but you won’t own it at the end of the agreement.

Car Loan

This is a type of personal loan used specifically to purchase a car. Depending on the lender, it can be secured against the car or unsecured.

County Court Judgment (CCJ)

A CCJ is a legal decision issued when someone fails to repay a debt. It can impact your credit score, but car finance may still be available depending on your current financial situation.

Credit Check

A credit check is a review of your credit history by lenders to determine how likely you are to repay a loan. It’s an essential step in most finance applications.

Credit Lender

This is the organisation or bank that lends you the money to buy your vehicle under a finance agreement.

Credit Score

Your credit score is a number based on your financial history. It helps lenders decide whether to approve your application and what interest rate to offer.

Deposit

A deposit is the initial payment you make towards the cost of a car. The larger your deposit, the lower your monthly payments will be.

Depreciation

Depreciation refers to how a car’s value drops over time due to age, mileage, and wear and tear. It’s important to consider, especially when choosing finance options like PCP.

Final Thoughts

Understanding car finance terms is the first step to making a confident and informed decision. From annual mileage to depreciation, knowing what each term means can help you avoid surprises and choose the right option for your budget. At Hilton Garage, we make car buying simple, whether you’re shopping online or visiting our Derby dealership. Browse our used cars today and discover car finance made easy, even with bad credit.