FAQs and Glossary
Fair, wear and tear is when the vehicle is damaged beyond normal expectations in a contract term of a vehicle, charges are applied.
The definition of "Fair Wear and Tear" can often be an area of dispute in leasing scenarios so the British Vehicle Rental and Leasing Association (BVRLA) publish clear guidelines as to what should be regarded as fair. It is unrealistic for lessors to expect back a fleet car in showroom condition, and hence the industry term of "fair wear and tear" - which sets an industry standard for the "reasonable" condition of the car for age and mileage at end of lease.
This is the final rental or payment, that may be a balloon or Guaranteed Minimum future value. Once this has been paid, including any option to purchase fee, the vehicle is yours to keep.
The FLA Lending Code 2004 sets out standards of good practice for the industry and is intended to reassure anyone who applies for finance from FLA’s full members that they are doing business with reputable organisations. For more information please visit www.fla.org.uk.
Finance Lease agreements enable customers to either (1) pay the entire vehicle cost, fees and interest across an agreed term in monthly installments - which is also known as a Full Payout Lease, or (2) opt to pay lower monthly payments with a final lump sum payment at the end of the agreement - which is also known as a Balloon Lease.
A Finance Company is a company which lends money to customers via a Credit Agreement.
This is when the rate of interest you pay on a credit agreement is fixed at the time you borrow money. The main advantage of a credit agreement with a fixed rate of interest is that you know exactly how much you’ll be repaying each month, and that the amount remains the same for the life of the loan.
Flat Rate is the monthly interest rate charged on the amount borrowed over the term. It does not take into account the reduction in the capital when payments are made so does not accurately reflect the total cost of lending. Flat rates should not be confused with APR.
Financial Difficulties is as per definition as payment difficulties.