Glossary

Advance Payment/Initial Rental - The amount you pay at the beginning of your agreement once your vehicle has been delivered, usually equivalent to the value of 3 or 6 monthly rentals/payments.

Annual Investment Allowance - A capital allowance which allows you to deduct the value of plant (vans etc.) from your taxable profits.

Approved Mileage Allowance Payments (AMAP) - The Government guidance for reimbursement when using your personal vehicle for business use. For cars and vans the rate is 45 pence per mile (PPM) for the first 10,000 miles and 25 pence per mile thereafter.

Benefit In Kind - The tax you pay for private use of a company vehicle.

Capital Allowances - Money which you can claim back from the Government for purchases, works on a percentage scale. Ask your accountant to see if this applies to you.

Car Allowance - When an employer provides money via your wages for you to pay for a car.

CO2 - Carbon Dioxide, most vehicles are now taxed based on their C02 emissions, measured as grams per kilometre (g/km).

Depreciation - The value that a vehicle loses due to use.

Early Termination - When you end a finance agreement before it has reached the agreed end date there is a charge, the amount charged for an early termination varies depending on the funder and the type of agreement.

Final Payment (Balloon) - The final predetermined payment in a purchase agreement.

Finance Rental - The monthly rentals you make for the vehicle.

Grey Fleet - Vehicles owned by employees and used for business use.

Maintenance - A package you add on to your lease which includes servicing and also tyres in most cases.

Maintenance / Service Rental - The monthly payments you make for maintenance on your vehicle.

P11D Value - The taxable list price of a vehicle used to determine how much tax you pay. The P11d value includes all costs including any factory fit options but does not include first registration fee or RFL.

Payment Profile (e.g. 3+35) - How your payments/rentals are spread out, the first number is how many payments/rentals up front and the second figure is subsequent monthly payments thereafter.

Pooled Mileage - If you have a fleet of 10 or more you can add all the mileage to a ‘pool’, if one vehicle goes over mileage it can be balanced by another being under. Some pooled mileage agreements will refund you if your vehicles are under mileage overall.

Rental - The monthly rentals you make for your vehicle.

Residual Value - The estimated end value of a vehicle after a given mileage and time period.

Road Fund Licence (RFL) - Also known as Road/Vehicle/Car Tax, or Vehicle Excise Duty (VED).

Terminal Pause - Your agreement is set up so that you do not make payments/rentals in the final months.

Whole Life Cost - The cost of all expenses associated with the vehicle and not just the rentals/payments.