Glossary of Terms
We offer a number of car leasing options per the list below. We think that it is in your best interests to understand leasing terminology and to this end we’ve put together an alphabetical list to help guide you through the leasing process.
We want you to make an informed decision that is best for you and we understand that it can sometimes appear complicated – we’re here to help and guide you through the process.
If you have any questions about our leasing offers then please feel free to contact us. We will endeavour to answer any of your questions promptly and honestly. There is no question too small to ask and we are here to help.
Glossary of Terms
An initial payment of up to 50% of the total rental value, there is no upper payment limit on personal contract purchase agreements.
This is the fee that we charge for our services and it is payable by you at the time of order.
Limited companies and non-government customers can claim back 50% of the VAT on their finance rental and 100% of the VAT paid on their service agreement.
Blocked VAT only applies to cars where there is an element of private usage; it refers to the total rental payable after the VAT has been reclaimed.
The amount of Carbon Dioxide (CO2) that a car emits from its exhaust affects the amount of company car tax and Road Fund Licence or (RFL) that it attracts. See our guide to CO2 emissions and company car tax
Consumer Credit Act 1974 or CCA
The 1974 act of parliament that provides legal protection for : private individuals, unincorporated companies and partnerships. Your legal rights are detailed within this act. Regulated Credit Agreements must allow cooling off period whereby you have the right to cancel (usually 14 days)
This is when a business leases a vehicle. This normally means that a number of different people will be using the vehicle, and it’s important that your insurance covers this and it shouldn't be used for personal use.
An off balance sheet method of acquiring the use of a vehicle. The company hires a vehicle for an agreed specified period and makes regular payments. The funder retains ownership and all of the associated risks.
All funders need to know that you have the means to make the payments that you are signing up for , your personal information that you provide will allow them to make an informed decision. We may pass on your personal information to credit reference agencies or finance providers to perform a credit search once you place an order.
Delivery Note or Acceptance Note
A document signed when the customer takes delivery of a vehicle. It confirms that you are happy with the condition of the vehicle and want your lease to commence The date on this document normally signals the start of the agreement and payments then begin one month later.
This is the amount of value that a vehicle will lose over a certain period of time. The deprecation is the difference between the original price and how much it'll be worth after the lease is over.
Early Termination Fee
This is when a customer decides that they want to end the agreement before the agreed rental term has been reached. The funder is able to charge a fee which will cover themselves for any potential losses in this circumstance.
Excess mileage charge
When you enter into a leasing contract, you'll be asked to set a mileage limit. If you then go over the mileage limit, you'll normally have the pay an excess mileage charge which can change in value depending on which funder you choose to go with. See FAQ’s for a worked example.
Fair wear and tear guide
This is a BVRLA guide that clarifies the definition of fair wear and tear at the end of a lease. At Belmont Vehicle Leasing - we follow their guidelines. See our guide to fair wear and tear here.
Once you have placed an order we may provide funders with personal and financial information about you and / or your business to provide funding for your lease. The funder or finance company will require you to enter into a finance agreement to facilitate the Lease, Purchase or Hire of the vehicle per your order.
In most cases, your regular motor insurance covers the leased vehicle f the vehicle is involved in an accident and is written off. However, in some cases the outstanding rentals may be more than an insurer is willing to pay. Gap insurance covers the difference between the cash value of the vehicle and what you still owe on the lease contract. Some leases include this in the contract and we are happy to discuss this with you.
Initial Rental payment , Deposit or Upfront costs
These are the costs that you have to pay before you actually enter into the leasing contract often equivalent to 3 or 6 monthly rentals.
This is the period of time in which you're able to use the vehicle, and the period of time that you will be paying on a monthly basis. A standard lease term will be either 24 or 36 or 48 months, although alternative periods of 12, 18 or 30 months can sometimes be arranged.
The lessee is the person who is leasing a vehicle – this is you!
The lessor is the finance / leasing company or funder who leases a vehicle to a lessee.
A lessor will give a lessee the option to include maintenance as part of their monthly payments. This covers any servicing the vehicle requires, including: repairs, new parts, tyres, batteries and also exhausts. In some cases it will cover the MOT.
If you choose a maintenance package, then it's important to take note that any damage that is incurred from delivery, or through accidental damage or negligent damage will be payable. View our guide to Maintenance packages here for more information.
Manufacturer's list price
This is a basic price before options, VAT or any discounts have been applied.
This is the agreed amount of money that the lessee has to pay to the leasing company on a monthly basis. These payments last until the end of the contract period, although they can be paid off early is the lessee decides that they want to.
An MOT is the Ministry of Transport's annual test which covers the safety of a vehicle, its road worthiness and its exhaust emissions. Every vehicle on the road requires an MOT (unless it's under 3 years old), and if it fails, the fees need to be paid for repair or it will not be allowed on the roads.
If a vehicle fails its MOT, it can result in a fine and in some cases can lead to arrest.
An operating lease is the rental of an asset from a finance house or lessor, but not under terms that would classify it as a capital lease. The operating lease concept allows a business to keep from recording an asset on its balance sheet.
This type of arrangement is known as off-balance sheet financing.
An operating lease tends to have a shorter duration than a capital lease, and you (the lessee) do not have the option to purchase / acquire the asset at the end of the lease term.
During the rental period, you (the lessee) typically have unrestricted use of the asset, but you are responsible for the condition of the asset at the end of the lease, when it is returned to the lessor.
An operating lease is especially useful in situations where a business needs to replace its assets on a recurring basis, and so has a need to swap out old assets for new ones at regular intervals.
For example, the lessee may have decided to replace the office photocopier once every three years, and so enters into a series of operating leases to continually refresh this equipment.
Vehicles are most commonly leased under operating lease arrangements.
The finance house or lessor records the asset under an operating lease as a fixed asset on its books, and depreciates the asset over its useful life.
The expression of interest by you to acquire a vehicle from our website at the price and specification quoted.
The total amount that the leasing company or finance house will pay the manufacturer or dealer for the vehicle. It includes Vat , RFL , Delivery and other associated costs.
Someone that leases a vehicle for their own use, this means that it therefore can't be used for business purposes and only a single person is able to drive the vehicle.
The price at which the finance company agrees to sell a vehicle at the end of the contract. Note that sometimes the contract holder cannot buy the vehicle themselves or through a third party.
The leasing company will provide those customers who select this option, with a car to use if theirs is off the road.
This is an abbreviation for Road Fund Licence or Road Tax. This is usually included in your rental payment.
The sourcing or locating of or to identify otherwise the vehicle you have stated on your order. The arrangement and or procurement of funding from a finance source after completion of the necessary credit checks. The arranging of delivery of your vehicle form the relevant supplier.
We / Our / Ourselves /Us / Belmont Vehicle Leasing
The use of these terms (singular and plural) and any reference to these terms on this website means:
Belmont Vehicle Leasing Limited.