Car Leasing Glossary

Accident management handles road collisions for you or your company drivers. It isn't included in standard leases, but we can discuss options to add it.

Your annual mileage is the agreed distance you can drive each year. Going over this limit incurs an excess mileage charge at the end of your lease. While 8,000 and 10,000 miles are most common, we offer a range of mileage options. You'll select your preferred annual mileage during the leasing process.

This fixed amount charged by Xcite Car Leasing covers the administration required to facilitate your lease agreement, also referred to as an "Administration", "Arrangement" or "Processing" fee.

An ATO, or Authority-To-Order, is a document that forms part of your order confirmation document pack. This will need to be signed by you and will give us the authority to order a car from the manufacturer or dealer on your behalf.

A battery electric vehicle (BEV) is powered solely by a rechargeable battery pack. It produces zero tailpipe emissions and must be plugged in to charge.

BIK refers to benefits in kind, which are taxable benefits that an employee or company director receive from their employer in addition to their salary, sometimes referred to as perks or fringe benefits. When it comes to cars, these include a company car, car allowance or salary sacrifice arrangement.

Business contract hire (BCH) is a form of long-term rental, applicable for customers who are: self-employed, sole traders, Limited Liability Partnerships (LLP) or Limited Companies (Ltd), which have been in operation for a year or more.

VAT-registered businesses can reclaim a portion of the VAT on a business contract hire agreement - with prices advertised excluding the VAT.

The British Vehicle Rental and Leasing Association (or BVRLA) is a regulatory body for the rental and leasing marketplace. The BVRLA ensures that member organisations adhere to quality practices, providing customers with a high level of service. Xcite Car Leasing is a long-standing member, with our Director, Spencer Blake, having been the previous Chairperson of the BVRLA Leasing Committee.

Contract hire is a long-term vehicle lease for individuals or businesses. You customise and hire a brand-new car, typically for 2 to 4 years. Your fixed cost is based on the contract length and your chosen annual mileage. This cost is split into an initial payment and regular monthly payments; choosing a higher initial payment will reduce your monthly rate.

The contract length is the number of months that you wish to lease the vehicle for. The most common contract lengths are 24, 36 or 48 months (2, 3 or 4 years respectively).

The term "cooling-off period" refers to a 14-day period where a customer may change their mind and cancel the financial contract, without facing a penalty. It might also be known as the "cool period". 

This is a function implemented by the Financial Conduct Authority for all forms of financial contracts. In leasing, this only applies to personal contracts and the start date of the cooling-off period will be the date the finance documents are approved.

Please note that a new car can't be delivered during the cooling-off period, but if the car is ready we can arrange delivery for as soon as it expires.

Degradation is used to describe the reduction in the charging ability and maximum capacity of the batteries, usually in relation to electric and hybrid cars but it can happen to the battery of a non-EV car too. In EVs it can be caused by extended use and poor charging habits. It may also be referred to as deterioration.

The delivery lead time is an approximate length of time between ordering your vehicle and when it's expected to be delivered. There are many factors that positively and negatively affect the delivery lead time.

Depreciation is the loss of an asset's value over time. Vehicles lose value rapidly, especially in the first few years. Key depreciation factors include:

• Brand and model
• Installed features
• Vehicle condition
• Mileage and age

A car's predicted value at the lease end (residual value) directly impacts your monthly lease cost.

Electric range is the maximum distance an electric vehicle can travel on a single full charge before its battery is completely depleted.

An excess mileage charge is exactly as it sounds. If you drive more than your contracted mileage allowance, you'll be charged for every mile over your contracted allowance. Excess mileage is calculated at the end of your contract, as the total number of miles you've covered, rather than looking at annual mileages individually.

You might also see this referred to as "overmiles". This will typically be shown as a pence per mile (PPM) charge. 

A factory order is simply a car that's ordered from the manufacturer's factory. These will be the most customisable vehicles as the build hasn't started yet, but they will also have the longest lead time because of this. 

The Financial Conduct Authority (FCA), previously known as the Financial Services Authority (FSA), is the government agency that's responsible for devising and implementing legislation and regulations for business operating within the financial sector. Due to the arrangement of financial contracts, this includes leasing brokers such as Wessex Fleet.

Also known as a "finance agreement", "leasing agreement" or "contract", the finance documents represent the financial agreement between you and the funder for the lease of a chosen vehicle. This agreement must be read carefully, agreed to and signed by you, or if it's a business lease, by an authorised party. 

A finance lease is a form of leasing available to business customers. It works very differently to contract hire as there's an option to purchase the vehicle at the end of the contract. The full cost of the vehicle, including interest charges, may be spread over the duration of the contract or lower monthly payments be made, followed by a substantial final lump sum "balloon payment". Finance leases appeal to some businesses as there can be significant tax benefits when compared to other forms of vehicle acquisition.

The term "fleet" describes a collection of vehicles used by companies for business purposes. Fleet management is a service that meets the requirements of a company's fleet, ensuring that the vehicles are fit for business use, roadworthy and adhering to UK legislation. This service will include vehicle financing & supply including short-term rental, grey fleet management, servicing & maintenance, drivers license checks and fuel card management. 

Delivery of a vehicle to any destination in the UK mainland free of charge is something we offer as standard with every business and personal contract hire lease agreement. 

Delivery doesn't mean the vehicle will be trailered and some cars will be driven to the address. If you want the vehicle to be trailered to you then there may be an additional cost. 

Slang for front trunk or eTrunk. Since EVs lack a bulky engine block, the space under the hood can be used as extra storage.

Hire purchase is a financial agreement involving elements of leasing and a loan, with interest rates applied. Essentially, you pay the full cost of the vehicle plus interest, spread across regular monthly instalments. You will have use of the vehicle for the duration of the agreement and full ownership after the last payment has been made.

The initial payment is the first payment that you make as part of your lease agreement. It's not an initial deposit as it is non-refundable and forms part of the total cost of the lease. It may also be referred to as the "initial rental".

Initial payments are usually shown as 1, 3, 6 or 9 times the amount of the monthly rentals. It's your choice how much the initial payment is, although a higher initial payment will result in lower monthly payments.

A leasing broker is a specialist organisation that can negotiate the best lease agreement for a customer, on their behalf. Xcite Car Leasing is a leasing broker with decades of industry experience, expertise and inside knowledge of the leasing world. 

The Leasing Broker Federation is an organisation that provides industry updates to its members and ranks each leasing broker. Wessex Fleet was proudly ranked 2nd in our category and 6th overall for 2018.

A vehicle's on-the-road (OTR) price is the cost of putting the vehicle on the road in the UK. This includes the manufacturer's price of the vehicle and any optional extras (with any applicable discount that we negotiate on your behalf, using our reputation and relationships), the cost of registering and taxing the vehicle and any other associated cost.

 An MHEV is a mild hybrid vehicle with a small electric motor that assists the engine during acceleration to save fuel. It can't drive on electricity alone, unlike a full hybrid.

Personal contract hire (PCH) is a leasing agreement which operates similarly to a long-term rental agreement. It's similar to a  business contract hire, but the finance and credit checks are linked to the individual rather than a business. VAT can't be reclaimed on a PCH agreement, although the prices advertised are inclusive of this extra amount.

A plug-in hybrid vehicle (PHEV) features both a traditional combustion engine and a larger, rechargeable electric battery. It allows for short, purely electric drives before the petrol/diesel engine kicks in.

This is the term given to a driver's fear of an electric vehicle (EV) running out of power before the end of their journey. With advancements in EV technology, range anxiety is no longer as much of a concern. For more information take a look at our electric guides.

A system that captures the kinetic energy usually lost when slowing down or braking, converting it into electricity to recharge the battery and extend your range.

The residual value is the estimated value of a vehicle at the end of the contract. The residual value is used to determine the cost of a lease and is affected by mileage allowances and contract length. It's also sometimes enhanced by the inclusion of a maintenance plan.