14.02.2020

For a first-time buyer, understanding the lingo of seasoned motorists is a bit like learning a foreign language. With all manner of new terms, acronyms and terminology getting thrown your way, it’s easy to get confused when you’re shopping around for that inaugural, all-important car purchase.

So, before you reach a decision, you must get to grips with the words and phrases you’ll be encountering on your search. From balloon payments and dry weight to monocoques and SORNs, familiarise yourself with the vocabulary of car buying with this helpful glossary.

A

Administration fee - A fee that is usually charged at the start of the finance agreement, paid to lenders to cover their administrative costs, such as issuing relevant documentation and setting up the finance. Also known as an acceptance fee.
Adaptive cruise control - An automated vehicle speed management system that can identify traffic ahead, altering the speed accordingly. Also known as intelligent cruise control.
Agreement term - The agreed fixed length of time in which you have to repay the finance.
Annual mileage - The amount of mileage a car on finance is allowed to drive each year. Underestimating your mileage can lead to extra charges if you go over the agreed limit, which is usually a few pence per mile.

Appreciation - When a car’s value increases over time – you’ll likely see this used in relation to vintage models.

APR - APR stands for annual percentage rate, and represents the amount a loan will cost per year. This is the extra amount you’ll have to pay back on top of the amount you borrow and is usually represented as a percentage. APR includes the interest rate as well as any loan fees.

Automatic transmission - A gearbox that can shift through gears automatically, as opposed to a manual transmission. Cars with automatic transmission don’t feature a manual clutch or gearstick.

AWD - All-wheel drive. In cars of this kind, power is sent to all of the wheels of the car. AWD cars can either be permanent, where power will always be sent to each wheel, or switchable, when power is fed to two wheels (but will be sent to all four when a slip is detected). Manufacturers refer to this as 4x4 or 4WD.

B

Balloon payment - A final payment that occurs at the end of some financing agreements, which allows you to take ownership of the car. The exact figure is worked out and agreed upon at the start of the agreement.

BHP - Brake horsepower – the standard unit measurement of the power of an engine. Usually, the higher a car’s BHP, the higher its top speed and the faster its acceleration. BHP refers to the engine’s ‘raw’ power output before frictional losses occur.

C

CCD - Consumer Credit Directive. An EU directive designed to ensure transparency and high levels of customer protection when buying on credit.

Cooling-off period - Under the Consumer Credit Directive, this is the name of the 14-day window you have to reject and withdraw from a finance agreement.

Coupé - A two-door vehicle with a fixed roof. Often characterised by low height and steeply-angled sport silhouette.

Credit agreement - The agreement between you and the financing lender.

Credit rating - Also known as a credit score, this is based on your past credit history and existing debt. Lenders use the information held in your credit file to decide what rates to offer you. However, they’re not able to see your actual score.

Customer deposit - The initial payment you put down towards the car at the start of the finance agreement. The larger the deposit, the lower your monthly payments, and the more likely you’ll be accepted.


D

Dampers - Also known as shock absorbers, dampers are a key component of a car’s suspension system, taking the impact of the car as it rises and falls.

Deposit contribution - A deposit offered by the manufacturer or dealer, which they can put towards your finance agreement. It’s usually around £1,500-£2,500 but it depends on the offer and the car.

Depreciation - The percentage rate at which a vehicle’s value falls over a given timeframe. Depreciation occurs most rapidly during a car’s first three years on the road.

Dry weight - The weight of the car free of occupants, cargo, fuel, oil and water, i.e. the total weight of the car’s assembled components.

DVLA - The Driver Vehicle Licencing Agency. The UK government department responsible for recording the names of drivers and their vehicle registration details throughout the whole of the UK.


E

Electronic stability control - An electronic program that individually applies the brake to a particular wheel if it detects a loss of steering. This helps to avoid understeer and oversteer, as well as improve safety. Sometimes known as dynamic stability control.

E-REV - Extended-Range Electric Vehicle. A car that uses an electric motor but is also able to use an internal combustion engine to generate power, keeping a minimum level of charge in the battery whenever it gets low.

Estate - An elongated car body type that features an extended space behind the rear seats, usually accessed by a boot door.

EV - Electric vehicle, i.e. any car that’s powered by an electric motor.

F

Finance agreement - The agreement confirming the terms of the finance contract, typically explaining monthly payments, cancellation terms and what happens at the end when finance has been repaid.

Fixed-rate interest - The set interest which stays the same throughout the term of the finance agreement.

FSH - Full service history. Refers to a car with a full log of regular maintenance which has received annual service stamps from approved outlets.

Fuel injection - A system where atomised fuel is applied directly to the combustion chamber of each cylinder in a car’s engine.

FWD - Front-wheel drive. The engine power is applied to the front wheels of the car only.


G

GFV - Guaranteed future value, i.e. what the car will be worth at the end of the finance term.

Gross weight - The total weight of a car, plus the maximum load of occupants and cargo that it can safely hold.

Guarantor - Usually a parent or close relative who agrees to take on the debt if you can no longer keep up with the repayments.


H

Hatchback - A car body type defined by a boot door that covers almost all of the car’s rear side. Popular with families. 

Hire purchase - A finance deal that involves putting down a deposit followed by fixed monthly repayments. You don’t own the car until the debt is fully repaid.

HP - Horsepower – the standard unit measurement of an engine’s work rate.

Hybrid - Any vehicle powered by both a fuel engine and an electric motor.

I

Immobiliser - An electronic safety device fitted to a car that prevents the engine from turning on unless the correct key is used.


K

Kerb weight - The weight of a car with fuel, oil and water inside but without passengers or cargo.


L

List price - The cost of a car as it’s driven off the forecourt before any depreciation has occurred. Theoretically, the maximum a customer would pay for a car from a dealership.


M

Milometer - A device fitted in a car’s dashboard that counts the total number of miles the car has driven. It’s illegal to tamper with or change the number displayed on a milometer.

Monocoque - The structure type of most modern cars, referring to a set up whereby the body itself supports the car’s structural load, as opposed to relying on a different chassis.

MPG - Miles per gallon. The number of miles a car can travel for every gallon of fuel it consumes.


N

Nearly new car - A car that’s returned to the market after only a year or two’s ownership. The worst of its depreciation will already have occurred, but since it’s a fairly new model it can be attractive to buyers.

Negative equity - When a car has lost value and is worth less than the amount you still owe for the finance agreement.

New car - A car made to order from the dealership by a customer. If you buy a new car, you’ll be its first owner.


P

Personal Contract Purchase - Finance that is repaid with monthly payments after an initial deposit. You don’t own the car unless you decide to pay the optional balloon payment at the end.


R

Residual value - The value of the car at the end of your loan or finance agreement.

Road tax band - A grouping system which specifies how much road tax must be paid on a particular model.

RWD - Rear-wheel drive, where the power is sent to the rear wheels only.


S

Segment - Groupings for car models that outline size and shape. These range from city cars and superminis to luxury cars and SUVs

SORN - A Statutory Off-Road Notification (SORN) is when you register a vehicle that you no longer use on the road in exchange for a redemption from vehicle tax. It also means that you are not legally required to insure the vehicle.

T

Torque - The twisting or turning force generated by a motor. Often shown in Newton Metres (NM) in the form of number of revolutions per minute (RPM).

Transmission - The type of gearbox a car is fitted with. Can either be manual, automatic or semi-automatic.


U

Used car - Any vehicle not made-to-order or purchased directly from the manufacturer through a dealership. Will have had a previous owner or several owners, before being resold privately or through a dealership.


V

VED - Vehicle exercise duty, or road tax. Unless it’s a zero-emissions vehicle, or one that emits less than 100g/km which was registered before April 2017, you’ll have to pay VED. How much depends on your car’s emissions, age, value and fuel type.

VIN - Vehicle Identification Number. This is a unique number that’s designated to each vehicle during its manufacturing. Used to keep a record of and identify vehicles, allowing their full history to be checked.


W

Written-off - When your car is involved in an accident and the cost of repairing it is higher than the cost to replace, it’s written-off.


We hope this has helped clear up some confusion! Looking for more from Brindley Garages? Head here to check out more news from the motoring world, or if you’re in the market for a new car, see how we can help at our homepage.