Index
Car Finance Glossary
Every car finance term, explained in plain English with a worked number. Each entry links to the calculator or guide that puts it to work.
By CarFinanceCalculator.uk editorial teamChecked against FCA and primary sources
IndependentWe sell no financeNo commissionMaths based on FCA rules & the Consumer Credit Act 1974See how we calculate
Glossary
- 01GMFVGMFV (the guaranteed minimum future value) is your PCP balloon, set up front. See how it shapes your monthly cost and total cost — free, plain English.
- 02Balloon PaymentA balloon payment is the lump sum at the end of a PCP. See how it's set, what it costs you overall, and how to plan for it — free and in plain English.
- 03APRAPR explained in plain English for UK car finance: what it means, how it works, and a worked example. Then try the free calculator that puts it to work.
- 04Flat RateFlat Rate explained in plain English for UK car finance: what it means, how it works, and a worked example. Then try the free calculator that puts it to work.
- 05GAP InsuranceGAP Insurance explained in plain English for UK car finance: what it means, how it works, and a worked example. Then try the free calculator that puts it to work.
- 06Conditional SaleConditional sale is a simple fixed-repayment car finance plan where you own the car once paid. See how it works and the true cost — free and independent.
- 07Excess MileageExcess Mileage explained in plain English for UK car finance: what it means, how it works, and a worked example. Then try the free calculator that puts it to work.
- 08EquityEquity explained in plain English for UK car finance: what it means, how it works, and a worked example. Then try the free calculator that puts it to work.
- 09Soft SearchSoft Search explained in plain English for UK car finance: what it means, how it works, and a worked example. Then try the free calculator that puts it to work.
- 10Hard SearchHard Search explained in plain English for UK car finance: what it means, how it works, and a worked example. Then try the free calculator that puts it to work.
- 11Optional Final PaymentThe optional final payment is the balloon you pay to keep the car at the end of a PCP. See how it's set and what it costs you overall — free and independent.
- 12GuarantorGuarantor explained in plain English for UK car finance: what it means, how it works, and a worked example. Then try the free calculator that puts it to work.
- 13Voluntary SurrenderVoluntary surrender means handing the car back to the lender before the term ends. See how it works, the costs and the credit-score impact — free, independent.
- 14Settlement FigureYour settlement figure is what it costs to pay off car finance early. See how it's calculated, the interest rebate and any fees — free and independent.
- 15Negative EquityNegative equity means your car is worth less than the finance left on it. See why it happens, how to check yours, and how to get out — free and independent.