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You’re sure to encounter plenty of jargon when you are attempting to buy a new car. Failing to understand these terms could mean that you sign for something you don’t really want, which in turn could bump up your payments. So make sure you know the key terms by reading this glossary.
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BUYING A NEW CAR GLOSSARY - JARGON BUSTER
APR – The annual percentage rate that you will pay on a new car loan – the lower the APR, the more money you will save.
BHP – Brake horse power. Used to indicate the amount of power an engine can produce at a certain speed.
Clocking – When the mileage is adjusted to increase the value of the vehicle. This can be difficult to spot when you buy a new car, but be sure to look out for it.
Depreciation – How rapidly a car loses its value. Most cars will lose at least 50% of their original value after three years.
Down-payment – This is the money you pay initially to reduce the amount you have to pay interest on, therefore cutting your monthly payments.
DVLA – The Driver and Vehicle Licensing Agency where you must record all changes of vehicle ownership in the UK.
EuroNCAP – Standing for the European New Car Assessment Programme which tests the safety of each model of vehicle - the higher the rating, the safer the car with five stars being the maximum score.
ESR – Meaning electric sunroof – operated with a simple push of a button instead of with a winding mechanism.
FSH – Full service history - this is the complete service record of the car you are buying but obviously this is less relevant with new cars.
GPS – Meaning global positioning satellite, this is used to help you navigate your journey.
Grey import – Cars are often sold cheaper in mainland Europe than they are in the UK. As a result it is not uncommon for dealers to ship vehicles in from other countries without the permission of the manufacturer – these are known as ‘grey imports’.
Hybrid cars – An increasingly popular type of vehicle among the environmentally conscious, a hybrid car uses an electric motor and an engine which reduces Carbon Dioxide emissions and makes the vehicles more fuel efficient. Hybrid cars are among the hottest-selling vehicles in the world and include the likes of the Toyota Prius and the Honda Civic.
ICE – Standing for ‘in car entertainment’ this refers to aspects such as CD players, DVD players, etc.
Kit car – Refers to a vehicle that has been put together privately from a collection of parts.
Lemon – A car with a poor service history that might even be dangerous to drive.
MOT – The Ministry of Transport has an annual test which all cars in the UK must pass to prove they are roadworthy - driving a vehicle that hasn’t passed this test is illegal.
MPG – When buying a new car it is important to look beyond the price tag of the vehicle and consider how much you will pay on the car in the long-term. One factor to consider are the fuel costs which is indicated by the number of miles per gallon (mpg) the car can manage. Miles per gallon are calculated in idyllic conditions on a test track, and as such you are unlikely to replicate the MPG written on the vehicle. Nevertheless, they act as a good indication of how regularly you will have to fill up your tank.
PCP – Personal contract purchase is effectively the same as car leasing but gives you the option to buy the car at the end of the leasing period.
PLP – A personal leasing plan in which you pay the car finance company monthly instalments based on the value of the vehicle when you start your contract and its worth at the end of the contract period, after depreciation.
Residual value – How much the car is worth at the end of the leasing period, i.e. once depreciation is considered.
Ringer – A car that has been stolen or had its identity changed.
Sat Nav – An abbreviated version of ‘satellite navigation’ – a system used to help you navigate your journey.
T&T – This stands for tax and MOT and means that the car has passed the Department of Transport’s MOT test and has road tax.
V5 – Make sure that any car you buy comes with a V5 – this is its logbook used for registration purposes.
VIN – Vehicle Identification Number, a 17 digit number that should be found on the metal plate in the engine bay of a car. This is unique to every car and contains information on when and where it was built. This number should always be found in the ‘V5’.
Write-off – Commonly used to refer to a vehicle that has been damaged or stolen. If you are involved in an accident your insurance company could choose to pay an agreed value rather than pay for repairs to the vehicle because the damage is too extensive.
ZEV – Refers to a zero emissions vehicle, such as an electric car, which does not produce any harmful emissions that could negatively impact the environment.
In the final section we’ll examine some of your frequently asked questions.
Move on to part five of the guide to buying a new car…
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