Car Leasing Glossary — 100 Essential UK Leasing Terms
Updated 2025: Clear, plain-English definitions for every leasing term you'll ever encounter. Search, browse A–Z, and click through for deeper guides.
A
Agreement
The contract outlining the vehicle, term, mileage, and responsibilities between the hirer and funder.
Annual Mileage
The miles per year included in the lease. Going over this triggers excess mileage charges. See: How to Choose the Right Lease Mileage.
Approval in Principle (AIP)
Indicative approval subject to full underwriting.
APR
Relevant to loans/PCP/HP finance. Not used for contract hire pricing.
Add-On Maintenance
Optional package covering servicing, tyres and breakdown under the monthly rental.
Accessory Pack
Dealer/OEM accessories added to the vehicle. May affect P11D value and pricing.
Administration Fee
A fee charged for the processing of the lease order/arrangement.
Allocation / Build Slot
A manufacturer production slot associated with a factory order vehicle.
Alloy Wheel Damage
Scuffs beyond fair wear & tear may be charged at return.
Alternative Fuel Vehicle (AFV)
EVs, hybrids, or hydrogen vehicles — may have tax/emission benefits.
B
BCH — Business Contract Hire
Leasing for businesses with potential VAT/tax benefits. See: Business Leasing Guide.
BIK — Benefit-in-Kind
Company car tax calculated from P11D value and CO₂. Related: Company Car Tax 2025
Broker
An FCA-authorised intermediary (like Silverstone Leasing) that sources offers from multiple funders.
BVRLA
Industry body setting Fair Wear & Tear standards and conduct expectations.
Bad Credit
Not an automatic decline. Affordability, recent conduct and stability are key factors. See: Bad Credit Leasing Guide
Benefit Statement
Employer document outlining deductions/benefits under salary sacrifice schemes.
Business Use
Work-related journeys excluding commuting (for tax/insurance rules).
Base Rate
Interest benchmark influencing ownership product pricing.
Battery Degradation
A reduction in EV battery range over time — usually warranty protected.
C
Cancellation Rights
Consumer protections when cancelling orders within regulated cooling-off periods. See: Your Rights.
Cooling-Off Period
Time after signing where cancellation may be allowed.
Credit Check
Assessment of credit conduct & affordability before approval.
Company Car Tax
Tax based on private use of a work-provided vehicle. EVs offer big savings. See: Guide 2025
Congestion Charge
Fee for driving in certain city zones. EVs may be exempt.
Collection & Delivery
Logs handover and return logistics. Confirm documentation required.
Commission Disclosure
FCA requirement to show how brokers are paid. See: Silverstone Disclosure
Continuous Payment Authority (CPA)
Direct Debit authorisation permitting automatic rental payments.
Courtesy Car
Short-term replacement during repairs (depending on policy).
D
Damage Recharge
Charges applied for damage beyond Fair Wear & Tear standards at return.
Depreciation
Loss of value over time. In leasing, this risk is carried by the funder, not the driver.
Direct Debit Mandate
Agreement allowing automatic payment of initial and monthly rentals.
Delivery Lead Time
Estimated time for delivery — shorter for in-stock vehicles, longer for factory orders.
Dealer Contribution
Discount/incentive from manufacturer/dealer lowering rentals.
Documentation Fee
Charged in some agreements for administering the contract.
DVLA
UK licensing authority. The funder is the registered keeper during the lease.
Drive-Away Insurance
Short-term cover at handover if needed before full insurance starts.
Duration (Term)
Total length of the agreement, typically 24–48 months.
Delivery Note
Record signed at handover confirming mileage/condition at delivery.
E
Early Termination
Ending the contract early usually incurs charges based on funder policy.
End of Lease
Inspection and handback process. See: Return Guide.
EV — Electric Vehicle
Battery-only vehicles with no combustion engine. See: EV Leasing Guide.
Excess Mileage
Charge per mile beyond your annual mileage allowance.
Excess Wear & Tear
Damage beyond what is acceptable under Fair Wear & Tear guidelines.
Eligibility Criteria
Basic requirements: residency, licence, creditworthiness, affordability.
Extension (Lease)
Short continuation while awaiting replacement delivery. Subject to approval.
ETA — Estimated Time of Arrival
Indicative forecast for factory order delivery; can revise with logistics.
E-Signature
Digital signature used to complete documentation quickly and securely.
Excess Protection
Insurance add-on covering certain excess costs if applicable.
F
Fair Wear & Tear
Industry standard set by BVRLA for acceptable use at return.
Factory Order
Vehicle built to your exact spec. See: Factory vs In-Stock Leasing.
FCA — Financial Conduct Authority
Regulates consumer credit activities including car leasing.
Funder
The finance company that owns the vehicle during the lease.
Finance Approval
Final underwriting acceptance confirming you are eligible.
Fitted Options
Factory/dealer options added to a car; can influence price and BIK.
Fuel Type
Petrol, diesel, hybrid, PHEV, EV — each with cost and tax implications.
Free UK Delivery
Included in most leases within mainland UK.
Fleet Code
Identifier used by manufacturers/funders for ordering and support.
Funder Maintenance
Servicing, tyres, breakdown covered by the funder.
G
GAP Insurance
Covers any shortfall if the car is written off — insurer payout vs finance liability.
Gross Salary
Salary before tax/NI. Used when calculating salary sacrifice deductions.
Guarantor
Someone who agrees to be responsible for payments if the hirer fails to pay.
Government Grants
EV grants/charging schemes vary — subject to eligibility and budget.
Guaranteed Delivery Window
An agreed delivery timeframe (rare and funder-specific).
Grey Fleet
Employee-owned cars used for work — separate from company vehicles.
Grade (Return)
Condition benchmark sometimes used at handback inspections.
Gross Weight (GVW)
Important for vans: legal payload limits differ by weight class.
Workplace Charging Scheme
Government support for installing EV chargers at workplaces.
Green Number Plates
Identifies zero-emission vehicles — no direct tax benefit alone.
H
Handback Inspection
Vehicle check at end of lease under fair wear and tear rules.
Hire Agreement
Legal structure of contract hire: you use, not own, the vehicle.
Handover Checklist
Checklist ensuring keys, documents and accessories are all present.
Home Charger
EV wallbox installed at home; off-peak tariffs reduce running costs.
HP — Hire Purchase
Ownership finance — different from PCH contract hire.
Hybrid (HEV/MHEV)
Electric motor assists the engine. Not plug-in like PHEV.
Headline Rental
Advertised monthly figure based on a sample profile.
Hard Credit Search
Search visible to other lenders — can influence credit score.
Holiday Mileage
Seasonal spikes to consider when setting annual mileage.
Manufacturer Warranty
Defect coverage usually lasts for the full lease.
I
Initial Rental
First payment profile (e.g., 1+, 3+, 6+, 9+) affecting monthly cashflow. See: Initial Rental Explained.
In-Stock
Ready to deliver vehicles for fast turnaround — faster than factory orders.
Insurance (Fully Comprehensive)
Required with the hirer as main policyholder for the full term.
ID/KYC Checks
Identity verification required to prevent fraud and complete finance approval.
ICE — Internal Combustion Engine
Traditional petrol/diesel engine, compared with EV and hybrids.
Inspection Report
Condition summary at return — retain photos for proof.
Inevitable Deterioration
Normal use signs allowed under wear & tear rules.
Interest Rate
Relevant in ownership finance, not usually shown for contract hire.
Import (Parallel)
Vehicles not originally supplied to UK specification.
Initial Payment Profile
Structure like 6+35 where "6" = upfront rentals and "35" = months following.
J
Joint Application
Two applicants assessed together to support affordability.
Just-In-Time Delivery
Aligned delivery with end of an existing lease to avoid rentals overlap.
Journey Profile
Your regular trip patterns guiding the choice of fuel type.
Jargon Buster
Another name for this glossary reference.
Job-Need Vehicle
A car essential for an employee's role; may affect policy choices.
K
kWh & kW
kWh = battery capacity; kW = power/charging rate. See: kWh vs kW Guide.
Keys (Spare)
Both keys must be returned, otherwise recharge applies.
Keep Beyond Term
Vehicle stays under an extension agreement if approved.
Kerb Damage
Repairable scuffs may be charged at return if beyond acceptable limits.
Kitemark
Quality certification sometimes referenced on parts/accessories.
L
Lead Time
Estimated delivery schedule — impacted by availability/production.
Lease Extension
Short extension before replacement arrives — funder approval required.
Leasing vs Buying
Usage & lower risk vs potential ownership/equity. See: UK Cost Comparison.
List Price / P11D
Affects BIK — includes VAT and options.
Long-Term Rental
Another way to refer to contract hire.
Limited Company
Common BCH applicant; guarantees may be needed for new companies.
Liability for Damage
Hirer responsible for damage beyond fair wear & tear.
Locking Wheel Nut
Must be returned; missing item fees apply.
Logistics Charge
Additional transport fees where standard delivery isn’t possible.
Late Payment Fee
Fee for overdue rentals — terms vary by funder.
M
Maintenance Package
Servicing, tyres and breakdown included in monthly rentals.
Mileage Amendment
Changing your mileage mid-lease (subject to availability).
MOT
Required after 3 years — most leases end before MOT is due.
Manufacturer Support
OEM contributions reducing lease rentals while offers last.
Metallic Paint
Optional finish, may affect pricing and lead time.
Misfuelling Cover
Included in some maintenance/breakdown policies.
Maintenance Tyres
Tyre replacement under rules in the tyre policy.
Mileage Cap
Total mileage limit at contract end.
MHEV
Mild hybrid supporting an engine (non plug-in).
Mobile Collection
Home/office vehicle collection arrangement at end of lease.
N
Non-Ownership
Key feature of contract hire — you return the car.
Nationwide Delivery
UK mainland delivery included as standard.
No-Deposit Lease
Often a 1+ profile — the first payment equals the monthly rental.
Number Plates
Fitted before delivery with correct registration.
New Registration Plate
March/September UK plate changes — some drivers time delivery to match.
Notice to Terminate
Required for early termination where permitted.
Non-Status
Term for sub-prime lending segments — not typical in standard leasing.
Normal Wear
Acceptable wear & tear from everyday use.
Non-Maintained Lease
Servicing and tyres paid for by you — maintenance not included.
Net Pay
Take-home income — used to fund personal leasing.
O
OEM — Original Equipment Manufacturer
Vehicle brand building the car (e.g., Audi, BMW, Tesla).
OTR — On-The-Road Price
Cash price including tax, prep and registration.
Order Confirmation
Document confirming spec, pricing and contact details.
Order Cancellation Fee
Fee applicable if costs were incurred prior to cancellation.
Optional Extras
Upgrades that may affect pricing, tax and delivery time.
Off-Peak Tariff (EV)
Cheaper charging at night lowering TCO.
Operating Lease
Accounting term for off-balance-sheet leasing.
Outside Inflation
Price movement driven by external conditions — quotes have limited validity.
Ownership Risk
Risk of depreciation borne by the owner — avoided with leasing.
P
PCH — Personal Contract Hire
Usage only lease paid from net pay. See: Personal Leasing Guide.
PCP — Personal Contract Purchase
Option to buy at the end — unlike PCH.
P11D Value
Used to calculate BIK on company cars.
Pipeline Vehicle
Vehicle already in build — quicker delivery than custom orders.
Plug-in Grant (Historic)
Former UK EV subsidy — check current schemes.
PDI — Pre-Delivery Inspection
Quality check before delivery.
Pro-Rata Rental
Adjusted payment if delivery isn’t on the billing date.
Provisioning Fee
Occasional fee for logistics or special delivery arrangements.
Public Charging
Charging at public networks — often higher cost than home charging.
Plate Change
UK plate updates every March/September — impacts desirability.
Q
Quotation Validity
Window during which quoted rentals and support apply.
Quote ID
Reference for tracking pricing and offers.
Qualifying EV
Meets eligibility for benefit or incentive criteria.
Quick Turnaround
Fast delivery available for in-stock vehicles.
Quotation Compare
Checking multiple quotes from funders to secure best value.
R
Residual Value (RV)
Forecast value at end of term — low RV usually means higher rentals.
Road Fund Licence (VED)
Road tax — typically included in the lease.
RDE2 Diesel
Cleaner diesel engines affecting BIK supplements.
Registration Date
Date vehicle is officially registered — impacts plate/warranty.
Renewal
Arranging a new lease before the current one ends — avoids downtime.
Return Standards
Requirements for condition and items at handback.
Range (EV)
Distance possible per charge — affected by weather, speed and use.
Roadside Assistance
Breakdown cover from OEM or funder.
Relief Vehicle
Temporary replacement while the car is off-road (policy dependent).
Refunds
Refund of overpayments or fees per contract/regulation.
S
Salary Sacrifice
Lease via gross salary deduction — includes insurance, maintenance, and tax benefits. See: Salary Sacrifice Guide.
Salary Sacrifice vs Personal Leasing
Compares pre-tax vs post-tax schemes for cost efficiency. See: Comparison Guide.
Service Schedule
Intervals for maintenance — must follow manufacturer guidance.
Short-Term Lease
Typically 6–18 months — suited for projects or interim vehicles.
Silverstone LoyaltyPlus
Exclusive rewards programme for returning customers. See: LoyaltyPlus.
Signature Offers
Exclusive manufacturer-backed lease deals handpicked by Silverstone Leasing. See: Signature Offers.
Special Offers
Limited-time lease deals across manufacturers. See: Current Specials.
Sports & Prestige Leasing
High-performance vehicles under bespoke funder terms. See: Sports & Prestige Leasing.
Sole Trader
Individuals trading under their own name — eligible for business contract hire.
Stock Vehicle
Pre-registered or ready-built car available for fast delivery.
T
TCFs — Treating Customers Fairly
FCA principle ensuring fair outcomes for all customers. See: Our Policy.
Tax Implications
Personal leases use post-tax pay; business leases can offset VAT and rental costs.
Telematics
Technology tracking vehicle performance and driver behaviour.
Tesla Exclusives
Silverstone’s dedicated offers for Model 3, Y, S, X. See: Tesla Leasing.
Term Length
Usually 24, 36 or 48 months — longer terms lower rentals but reduce flexibility.
Top-Up Maintenance
Upgrade an existing lease mid-term to include a maintenance package.
Total Cost of Ownership (TCO)
Overall cost of running a vehicle including lease, fuel, insurance, maintenance and tax. See: EV vs Petrol Cost Comparison.
Tyre Policy
Defines coverage and replacement conditions under maintenance packages.
TCO
Abbreviation of Total Cost of Ownership.
U
Used Electric Vehicle Leasing
Leasing previously registered EVs at lower monthly costs. See: Used EV Guide.
Underwriting
Final stage of credit approval verifying identity and income.
Upfront Payment
Synonym for initial rental.
Utility Costs
Energy costs associated with EV charging.
V
VAT (Value Added Tax)
Charged on all rentals. Businesses may reclaim part depending on usage.
V5C
Logbook retained by the funder during the lease.
Vehicle Order Form
Confirms exact vehicle specification, price, and delivery details.
Vehicle Excess
Amount payable on insurance claims.
Vehicle Substitution
Temporary replacement vehicle during downtime, if allowed.
Vehicle Tracker
Device used for security or insurance compliance.
Van Leasing
Leasing options tailored to trades and fleet. See: Van Leasing Guide.
Vehicle Repairs
Handled under maintenance or at hirer cost depending on plan type.
W
Wear & Tear
Acceptable vehicle deterioration. See Fair Wear & Tear.
WLTP
Worldwide Harmonised Light Vehicle Test Procedure — standard for fuel and emissions testing.
Wheel of Fortune
Silverstone Leasing’s monthly staff reward and celebration game! See: Wheel of Fortune.
Warranty
Manufacturer warranty covers defects for 3–7 years depending on brand.
Wear Items
Consumables such as tyres, brake pads, wipers — part of maintenance costs.
X
XPENG
Innovative EV manufacturer partnering with Silverstone Leasing. See: XPENG Guide.
Y
Year-End Rentals
Adjustments or extensions to align contract expiry with fiscal year-end.
Young Driver Policy
Leasing usually available for drivers aged 21+ subject to underwriting.
Z
Zero Emission
Vehicles producing no tailpipe emissions — usually EVs.
Zero Deposit Leasing
Also called no-deposit leasing, ideal for cashflow flexibility.
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