Please see below a short list of motor related terms, which you may come across when speaking with a car dealer or researching finance online.
This is the length of time over which you agree to repay the amount you have borrowed from V12 Vehicle Finance.
The APR shows the annual cost of a finance agreement over and above the amount you have borrowed. The APR will include interest rate charges and any other fees included in the agreement, such as administrative fees. By law, the APR must be shown on relevant documentation presented to you. You can use the APR to compare the cost of different finance products.
If you have chosen Personal Contract Purchase (PCP) as your preferred finance option, you will be asked to select the annual mileage on your contract that best suits your anticipated requirements. This enables V12 Vehicle Finance to calculate the value of the car at the end of the agreement (also referred to as the Guaranteed Future Value). It is important to be realistic with your annual mileage estimation as excess mileage charges could apply if you choose to return the vehicle at the end of your agreement and your vehicle has exceeded the contracted annual mileage.
A credit agreement is a legally-binding contract between you, the customer and V12 Vehicle Finance, the finance company. The credit agreement must include details of the loan amount, the term, rate of interest, other charges and your rights and responsibilities for the duration of the agreement. You will receive a copy of the agreement you have entered into.
This is the last repayment to be made under your V12 Vehicle Finance agreement, and can include an option to purchase fee under a hire purchase agreement or the Guaranteed Future Value payment for a Personal Contract Purchase agreement.
This means the interest rate is fixed throughout the duration of the agreement.
This is where a percentage of the total cost of the car is deferred until the end of the contract. The forecast value of the car is provided by V12 Vehicle Finance at the beginning of your agreement. This is also referred to as the Final Balloon payment.
Hire purchase or HP is a V12 Vehicle Finance product. When taking out a HP agreement, you choose to pay an optional initial deposit, then fixed monthly repayments over a set number of months. With HP the ownership of the vehicle is not officially transferred to you, the customer until all payments have been made (including the £10 option to purchase fee).
A payment at the end of your V12 Vehicle Finance Hire Purchase agreement which, when paid, transfers ownership of the car from V12 Vehicle Finance to you, the customer.
Part-exchange involves trading in your existing car and using its excess value above any outstanding finance as part payment towards your new car, perhaps to help fund a deposit under a finance agreement.
Personal Contract Purchase (or PCP, for short) is a form of hire purchase agreement. It is a flexible finance product designed to help you purchase a car for a fixed period of time normally between 2 and 4 years. At the end of your finance agreement, you have three options:
Part Exchange – If the value of your vehicle exceeds the Guaranteed Future Value (GFV) amount, you can use the difference as a deposit towards another car. Your supplying dealer can help you with the valuation of your car.
Buy – Simply pay the Guaranteed Future Value (GFV) amount to own the car.
Return – Agree a handover date and return the car to us. Please note that additional charges may apply if you have exceeded the agreed contracted mileage or if there is damage to the vehicle that exceeds our wear and tear condition.
A quotation provides an indication of the costs that would apply if you went ahead with a finance agreement with V12 Vehicle Finance. The information shown in the quotation is prescribed by law and must include any deposit required, the monthly repayments, any Guaranteed Future Value payment, the Annual Percentage Rate (APR), other charges and the total amount payable. Asking for a quotation does not commit you to entering into an agreement at a later date, and will not leave a ‘footprint’ on your credit record.
The right of withdrawal under the Consumer Credit Act (CCA) applies only to the credit agreement – it is not intended to end any linked contract for the supply of goods or services that the credit is paying for, such as a vehicle.
By withdrawing from your V12 Vehicle Finance credit agreement you are redrawing from the finance agreement, not the purchase of the vehicle. You will still be required to pay for the vehicle some other way, unless that linked contract has a separate right of withdrawal or cancellation, so you must find a source of alternative funding. Once you’ve paid for the vehicle in full, (plus interest) title to the vehicle passes to you, the customer from V12 Vehicle Finance.
Voluntary Termination - Under the Consumer Credit Act 1974, you have the right to terminate your Hire Purchase or Personal Contract Purchase agreement at any time before the end of the contractual term. If you exercise your right to voluntary terminate the agreement, you will have nothing further to pay as long as:-
- You have paid up to half of the total amount payable under the agreement; and
- You return the car with no damages over reasonable wear and tear.
If you have not paid up to 50% of the total amount payable, then you will be liable for the difference between what you have paid and the amount to take you to the half. You will also be liable for any costs over and above reasonable wear and tear, as well as any applicable excess mileage charges.
Voluntary Surrender – this method is also known as voluntary repossession or voluntary vehicle surrender. This option is used where you are no longer able to meet the loan repayments, and therefore it is mutually agreed between you, the customer and V12 Vehicle Finance/Moneyway to terminate the agreement and return the vehicle.
If you are experiencing difficulty maintaining payments on your HP or PCP Agreement, please call our Collections Department on 0330 303 0567.
For free, independent advice, we also recommend that you contact: