Jargon Buster

Car Definitions, Acronyms & Jargon Buster

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A

ABC – Active Body Control. This system uses a number of sensors to monitor the body movement of a car at all times. It can then adjust the suspension accordingly, helping to reduce body roll when braking, cornering or accelerating.
A/C – Air Conditioning.
Administration Fee - This is a charge for setting up the finance and issuing the relevant documents. The cost will be included in the total amount payable and taken into account when the Annual Percentage Rate (APR) is calculated. It can sometimes also be referred to as a Documentation Fee.
Agreement Term - The length of time over which you agree to repay the finance – also referred to as the Length of the Agreement.
ALR – Automatic Locking Retractor, also goes under the name emergency locking retractor. Seatbelts usually have an emergency locking feature.
Annual Percentage Rate (APR) - 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 customers in showrooms. You can use the APR to compare the cost of different finance products.
Annual Mileage - In some finance agreements, such as Personal Contract Purchase and Lease Purchase, you will be asked to estimate your annual mileage at the beginning of the contract. This estimate helps the lender calculate the market value of the car at the end of the agreement (also referred to as the Guaranteed Minimum Future Value).  It’s important to be realistic because excess mileage is chargeable. This will be explained to you by your car dealer.
Auto – Automatic transmission – a car with no clutch or manual gears.
AWD – All-Wheel –Drive. The majority of cars are two wheel drive vehicles, with the engine driving through either the front or back wheels. AWD provides improved traction off road or in freezing conditions (snow and ice), worth remembering though that they do increase fuel consumption.
APR – Annual percentage rate – the real cost of the loan you take out on your car.
AYC –  Active Yaw Control, as used by Mitsubishi on later Evo models to sense and inhibit excessive understeer or oversteer - or yaw. A form of stability control by any other name.

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B

Bad Credit History - This refers to people who may have experienced repayment issues in the past and therefore do not have a great credit rating. You can check your credit rating with reference agencies including CallCredit, Experian, and Equifax. If you have adverse credit there are specialist lenders who can still help you, and some are listed in our member directory.
Balance Financed - This is the amount you need to borrow – usually the selling price of the car, less any deposit or part exchange allowance.
Balloon Payment - A balloon payment is the lump sum (also known as a Guaranteed Minimum Future Value) deferred to the end of a finance agreement in Personal Contract Purchases, Lease Purchases or similar agreements. It completes the finance agreement and allows you to take ownership of the car. You may be obliged to pay a balloon payment under some agreements, while it is optional under others – so be sure to check which type of agreement best serves your needs.
BHP – Brake Horse Power. This is a measure of an engine’s horsepower without the loss in power caused by the gearbox, generator, water pump, differential and any other auxiliary components such as power steering, alternator or the AC compressor. The term "brake" refers to the original use of a band brake to measure torque during test (which is multiplied by the engine RPM and a scaling constant to give horsepower).
Brake Assist – a system that senses when the brake has been used in an emergency and follows this with an artificial production of maximum braking effort.
BIK – Benefit in Kind taxation. The tax imposed on company car users for the notional value of being supplied with a car. Complex scale takes into account value of car, mileage driven and emissions rating.
Biofuel – At the moment the availability of cars that can take biofuels is limited but expanding. Biofuels include corn-based ethanol and rapeseed-oil biodiesel.

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C

Cash Back - This is an amount refunded to the customer (typically from a car’s part-exchange valuation) which is not required for a deposit. It can be an incentive used to attract new car buyers. The relevant schemes will vary between manufacturers.
Catalytic Converter – A catalytic converter is a metal box with chemical catalysts inside it that sits underneath your car. There's a pipe going into one end of the converter from the car engine and another pipe going out of the other end of the converter to the car's exhaust. The catalysts make chemical reactions happen that convert the molecules of pollution into simple, harmless gases. These are much safer to pass into the outside air.
C/C – Cruise Control. With cruise control you set the speed you want to maintain and the system automatically adjust your engine power in order to maintain this speed. To override this system you can either brake or accelerate.
Chassis - the steel frame of a vehicle, wheels, engine, and mechanical parts of a motor vehicle, to which the body is attached (see Monocoque-chassis)
CO2 Emissions – figures detailing the amount of carbon dioxide emitted by an engine.
Conditional Sale - Conditional Sale is a type of finance agreement where the sale of the vehicle is conditional on the customer completing the terms of the agreement – for example, making all of the repayments and paying other charges. These contracts are broadly similar to Hire Purchase agreements, except that the customer will automatically own the car at the end of the agreement rather than paying a fee for ownership, as in a Hire Purchase agreement.
Contract Hire – Instead of buying the car outright, with a contract hire deal you can lease it over a set period and then hand it back to the lease company.
Credit Agreement - A credit agreement is a legally-binding contract between the customer and the finance company. It must include details of the loan amount, the term, rates 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.
Credit Rating - A part of the scoring system used by finance companies to help them decide how to price the risk of doing business with you, and arrive at a suitable interest rate.
CRS – Child Restraint System, a much more sinister term for a child’s car seat, booster seat or cushion.
CVT – Continuously Variable Transmission, an increasingly popular form of automatic transmission which has either no steps at all (unlike a ‘conventional’ automatic) or a number of fixed steps with steplessly variable ratios between them.

CoD - Cylinder on Demand Technology - In Theory switching off cylinders to save on fuel and Co2 Emissions.

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D

Deposit Contribution - A new car dealer can sometimes make a contribution to the minimum deposit payment required under a finance agreement as part of a promotional or marketing campaign. This will help reduce the cost of your finance, but will be subject to your being approved for, and taking out, the finance agreement where the deposit contribution applies.
Depreciation – Every car loses some of its value as you drive it. Those that depreciate the least make the best used cars. The lowest depreciating cars still lose around 50% of their value after three years.
DDI – Diesel Direct Injection. This is when diesel fuel is squirted directly into the combustion chamber with extreme pressure. This helps to deliver improved control, fuel efficiency and controls noise and vibrations.
DME – Digital motor electronics, another name for Electronic Engine Management that controls ignition, fuel injection and other systems for optimum performance, emissions control and efficiency.
Documentation Fee - This is a charge for setting up the finance agreement and issuing the documents. The cost will be included in the total amount payable and taken into account when calculating the Annual Percentage Rate (APR). See also Administration Fee.
DOHC – double overhead camshaft, also known as Dual overhead camshaft or twin cam. This is characterised by two camshafts being located within the cylinder head, one for inlet and one for exhaust valves. Typical automotive engines equipped with dual overhead camshafts can have from two to four camshafts in total, depending on the engine configuration. The term Twin Cam doesn't tell the exact location of camshafts, but it is mostly used to describe DOHC structure.
Down-payment – The money you pay up front for a car to reduce your monthly payments.
DSTC – Dynamic stability and traction control system, Combines electronic stability control and traction control. Traction control adjusts engine power and sometimes applies brake force to limit the amount the driven wheels can slip when you try to accelerate hard. Stability control senses steering wheel input and car body movement to detect the onset of sliding or spinning. Automatically applies braking effort to individual wheels and adjusts engine power to restore stability.
DVLA – The Driver and Vehicle Licencing Agency where you must record changes of vehicle ownership.
DVD – Digital Versatile Disc or Digital Video Disc. This is the current favoured choice for storing information on a disc. They are used to store anything from music, film and the details for Sat Nav systems.

DIS - Driver information system with efficiency program.

The display of the driver information system (DIS) brings together a wide range of different information items in the centre of the cockpit and permanently indicates the vehicle’s current operating status. It is intuitively laid out, user-friendly, and allows the driver to stay focused on the road.

The DIS controls comprise two menu selection buttons and a reset button on the windscreen wiper lever to the right of the steering wheel. Depending on equipment specification, the DIS also provides information on the current status of installed components, such as the audio system, phone and navigation system. It offers the following functionalities:

  • Door and luggage compartment open warning
  • Auto Check Control
  • Radio station name or frequency
  • Outside temperature display, including ice warning
  • Speed warning function
  • On-board computer
  • Automatic gearbox selector lever settings
  • Telephone numbers and names from the telephone book.
  • Navigation directions

Auto Check Control continuously checks the brake and light systems, the coolant level and temperature, the oil pressure, the fuel level, the windscreen washer fluid level, the battery voltage and – if the optional tyre pressure monitoring system is fitted – the tyre pressures. Pictograms are displayed to alert the driver to any problems that arise.

The outside temperature is also displayed when the ignition is switched on. At temperatures below +5 °C an ice crystal symbol appears next to the temperature display to indicate the danger of ice on the road.

The DIS speed warning function allows you to store a maximum speed that should not be exceeded. As soon as the vehicle’s speed exceeds the stored maximum by around 10 km/h, the driver is warned of the fact by visual and acoustic signals.

With the integrated on-board computer, you can call up the current fuel economy, fuel range and travelling time as well as average fuel economy and average speed.

If the vehicle is fitted with an automatic gearbox, its current selector lever position is also displayed.

Efficiency program

One of the most important factors in achieving maximum fuel efficiency is the driver himself: a significant amount of fuel can be saved by sensible handling of the car – the driver and his driving style can reduce fuel consumption by up to 30 percent.

Audi has developed the driver information system with efficiency program in order to realise this fuel-saving potential without compromising driving pleasure. Depending on the driving situation, it provides valuable tips and information to enable the most efficient driving style.

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  • At a glance, the driver information system provides the driver with the on-board computer data most relevant to fuel consumption for the journey underway. For example, the system provides a direct comparison of fuel consumption at the given time and average fuel consumption.
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  • The enlarged display for the gearshift indicator signals to the driver when to change gear in order to drive as economically as possible. A large, colour-coded display indicates clearly whether the right gear is engaged, or whether shifting would be practical for the sake of efficiency.
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  • Activated comfort and auxiliary features such as the air conditioning or seat heating also increase fuel consumption. A specially developed display in the driver information system tells the driver which systems in the vehicle require additional energy and how high their share of fuel consumption is.
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  • The efficiency program continuously analyses energy consumption and gives the driver situation-specific tips on how to optimise fuel efficiency based on the given driving situation and driving style. The driver is thus made aware if, in terms of energy consumption, it is advisable to close an open window while the air conditioning is switched on.

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E

Early Settlement - This is when a customer pays off a finance agreement before the agreed term is completed. By doing so the customer may save on the interest that would have been charged for the remainder of the agreement.
EBA – Electronic Brake Assistance.
EBD – Electronic Brake force Distribution. This system helps to balance breaking effort with the front and rear wheels. This is mainly to prevent the rear wheels from locking up as weight transfers forwards, helping to maintain control and stability when hard breaking has occurred.
ECC – Electronic Climate Control. This automatically maintains a preset temperature within the car. This is achieved by either cooling or heating the incoming air.
ECU – Electronic Control Unit – also named electronic engine management. This is an integrated way of controlling functions such as fuel metering and delivery, as well as ignition.
EFI – Electronic Fuel Injection. Simply a way of getting fuel into a petrol engine.
EGR – Exhaust Gas Recirculation. A system which recirculates a proportion of exhaust gas back into the combustion chamber, to lower combustion temperatures and reduce emissions, particularly of harmful oxides of nitrogen.
ENCAP – European New Car Assessment Programme. This is a stringent European wide vehicle testing programme for safety. The safest cars receiving the much sought after 5 star rating.
ESP – Electronic Stability Programme. A system which typically uses a series of sensors in order analyse a vehicles cornering stability and when necessary reduce power or selectively apply gentle braking to correct any under or over steer.
Equity - Equity refers to the difference between the agreed market value of the car and the loan balance left to pay. If the market value of the car is higher than the outstanding finance, then the customer has equity in the car. If it is lower, the term ‘negative equity’ is often used.

 

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F

FHC – Fixed-head coupé, coupé describes a car with two doors and two seats. A fixed-head coupé has a roof that you can't fold down or remove.
Final Payment - This is the last repayment to be made under a finance agreement, and can include a voluntary option to purchase fee (under a hire purchase agreement) or a balloon payment (typically under a Personal Contract Purchase or Lease Purchase agreement).
Fixed Rate - This means the same interest rate is charged for the duration of the agreement.
Flat Rate - This is the base interest rate charged on the finance. Dealers will sometimes quote a monthly or annual flat rate, but you should always ask for the Annual Percentage Rate (APR), which more accurately describes the true cost of the finance. The flat interest rate does not include other charges like any administration fees.
FSH – Full Service History. Here you will find all the servicing history, along with MOT certificates, repair invoices and other documents giving a comprehensive view of the way the car has been used and maintained.
FSi - Fuel Stratified Injection. In contrast to conventional intake manifold injection on conventional spark-ignition engines, FSI engines inject fuel directly into the combustion chambers, dispensing with the throttle plate. That "unthrottles" the engine, reduces heat loss and thus increases output while reducing fuel consumption. The system uses two charge-air supply modes: stratified charge at partial load and homogeneous operation at full load. In the stratified charge mode, an combustible fuel-air mixture is only produced in a defined zone around the spark plug. The engine management electronics monitor engine load and adjust injection timing, pressure, quantity parameters as well as the air flow inside the cylinder via the air intake channel. At full load, FSI increases compression as well as engine efficiency and performance.
4WD – Four Wheeled Drive.

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G

GAP Insurance (Guaranteed Asset Protection) - If your car is involved in an accident, your insurer will only pay for its current market value.  GAP insurance can help cover the difference between the market value of the car and the amount of outstanding finance  under your credit agreement (Finance GAP), or the original purchase price of the car (Return to Invoice GAP). There are various types of GAP insurance on the market, so shop around and choose a product to suit your needs.
GPS – Global Positioning System. This refers to the use of satellite generated information to calculate a vehicle’s precise position. The essential reference point for satellite navigation systems.
Gross Income - This refers to your income before tax and National Insurance have been deducted. You may be asked for this information when completing a finance application.
Guaranteed Minimum Future Value - 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 assessed by the finance company at the beginning of the agreement. This is known as the Guaranteed Minimum Future Value.

In agreements such as Personal Contract Purchase, it is important to be realistic with your estimates of how many miles you expect to cover each year as this will help determine the GMFV (as well as the length of the agreement). See also Balloon Payment.

 

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H

Hybrid Fuel – Referring to a new generation of high efficiency, low emission vehicles typically combining a small petrol car of diesel engine with electric motors, used interactively.
Hire Purchase - Hire purchase (HP) is a popular car finance product. When taking out an HP agreement, you pay an initial deposit, then a fixed monthly repayment over a set number of months. Although you become the ‘registered keeper’ of the car, you are only hiring it and you don’t actually own it until you have made the final repayment (including any administration or option to purchase fee).

 

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I

Independent suspension – A system where every wheel is sprung separately so that if you ride over a bump it does not affect the entire vehicle – this is now fairly standard on most new cars.
Insurance - Car insurance is a legal requirement in the UK for motorists, and it will normally be a condition of a finance agreement that your car has comprehensive cover at all times.
Interest Rate - When you borrow money as part of a finance agreement, the price you are charged for doing so is called the interest rate. The level can sometimes be dependent on your credit history.
Intelligent Cruise Control – you may also hear the term Adaptive Cruise Control. This combines all the functions of cruise control, maintaining a set up speed, together with distance sensing to reduce your speed if needed.
IDI – Indirect Diesel Injection. Instead of injecting fuel directly into the combustion chamber, the fuel goes into a pre-chamber
I/R/S – Independent Rear Suspension. Each rear wheel is mounted and able to move in isolation from the other wheel. This can improve handling and comfort in comparison to cars with rear wheels linked to a common axle.
ISOFIX – referring to the standard child restraint system or child seat restraint system. ISO stands for the International Organisation for Standardisation.

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J

Joint Application - In some circumstances, you may want to consider a joint application for car finance. This is where two or more people apply for finance one a single application. This could improve your chances of meeting a lender’s affordability calculations. Check with your local dealer to see if this option is available to you.

 

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K

Kit car – A car assembled from a collection of parts, based on a kit formed chassis.

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L

Lease – This is a method of car finance where you take the car for a period of years and make payments based on the difference between the retail price and the car’s value at the end of the term. Once this predetermined term has passed, you must return the vehicle to the leasing company.
Lease Purchase - Lease Purchase is a form of Hire Purchase agreement under which a sum is deferred until the end of the contract. This is determined by the projected age of the car and the forecast mileage. Unlike with Personal Contract Purchase (PCP) agreements, the deferred amount (also referred to as a balloon payment) is not optional and must always be paid.
LED – Light Emitting Diodes. This is a compact, high intensity, fast reacting light source. LED has numerous uses including alarm system indicators and high intensity stop-lights.

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M

MET paint – short version of Metallic Paint.
MAF Mass Air Flow but more correctly referred to as an Air Mass Meter (AMM) or sometimes an Air Volume Meter.
MAP Manifold Absolute Pressure, which measures manifold pressure and is referred to as a Thrust Sensor by VAG as it (can sometimes?) includes an "IAT" Inlet Air Temperature sensor.
Monthly Rentals - Monthly rentals are what you pay every month under certain agreements like leases. They are referred to as rentals – rather than repayments – because you generally do not have the option to own the car outright and will need to return it to the leasing company at the end of the agreement.
Monocoque-Chassis- Monocoque is a one-piece structure which defines the overall shape of the car. While ladder, tubular space frame and backbone chassis provides only the stress members and need to build the body around them, monoque chassis is already incoporated with the body in a single piece.
In fact, the "one-piece" chassis is actually made by welding several pieces together. The floorpan, which is the largest piece, and other pieces are press-made by big stamping machines. They are spot welded together by robot arms (some even use laser welding) in a stream production line. The whole process just takes minutes.
MoT – A reference to the Ministry of Transport – each car over three years old is required to pass an annual test to prove it is road worthy.
MPG – Miles per gallon
MPV – Multi Purpose Vehicle, not multi people vehicle, known more as a people carrier.

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N

Net Income - Your earnings after income tax and national insurance have been deducted.
NCRS – New Car Security System. Basically how easy (or hard) your car is to break into and to drive away.

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O

OBC – On Board Computer. You can however obtain estimated arrival times, fuel consumption, time to next service etc.
OCD – Occupant Detection System. A feature of advanced airbag protection systems. If the system detects that no front passenger is on board then in the event of an accident the airbag will not deploy. The system may also be able to detect the size and position of the passenger, meaning that the airbag can be deployed in a way that provides maximum protection.
Option to Purchase Fee - A voluntary payment at the end of some finance agreements (such as hire purchase) which, if paid, transfers ownership of the car from the finance company to the customer.

 

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P

Part-Exchange - Part-exchange involves trading in your existing car and using its value as part payment for your new car, perhaps to help fund a deposit under a finance agreement.
PAB – Power assisted Breaks.
PAS – Power assisted Steering. Providing variable levels of assistance depending on your road speed.
PCP – An abbreviation for personal contract purchase, where the driver leases the vehicle over a set period with a mileage limit and has the option to buy or return the vehicle at the end of the term.
PDC – Park Distance Control. Sensors will detect obstacles and alert you when you are getting near.
Personal Contract Purchase - Personal Contract Purchase (PCP) is a form of hire purchase agreement, which includes a voluntary “balloon” payment at the end. This final amount represents the future residual value of the car, based on the age of the vehicle at the end of the agreement and the forecast mileage.

Monthly repayments are generally lower under a PCP agreement than a comparable HP agreement because of this deferred amount. With this type of agreement, payment of the future value of the car is optional. it must be paid if you wish to own the car outright, but you could simply decide to hand the keys back and start another agreement for a different vehicle.

 

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Q

Quotation - A quotation provides an indication of the costs that would apply if you went ahead with a finance agreement. The information shown in the quotation is prescribed by law and must include any deposit required, the monthly repayments, any balloon 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.

 

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R

Residual value – The resale value of a used car, that it is what it is worth after it has depreciated in value. Those with the strongest residual values are the best to sell on at a later point. This can also mean the value of your car at the end of the finance agreement. It may or may not be guaranteed by a finance company, depending on the terms of your contract. The residual value is determined by the resale appeal of the car, the mileage on the clock and the length of your finance agreement.

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S

Sat Nav – Satellite Navigation. Sat Nav tells you how to get to where you want to go.
Secured Loan - The majority of car finance agreements are secured against the vehicle. This means less risk all around as the car is recoverable in the event of payment difficulties, but the lender has greater flexibility in the terms and conditions that they can offer you.
Secondary Rental - If you want to keep renting the car once a lease agreement comes to an end, you can usually arrange a second agreement for the same car – typically in the form of either an annual rental or monthly repayments. This is often called a secondary rental.
Steering ratio – How far you have to turn the steering wheel compared to how far the wheels actually turn.
STC  Stability Traction Control system  - This combines electronic system control and traction control. Stability control senses steering wheel input and car body movement to detect the onset of sliding or spinning. Traction control adjusts engine power and can apply brake force to limit the amount the driven wheels can slip when accelerating hard.
SUV – Sport Utility Vehicle. Also known as 4x4, and certain estate cars.

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T

TA – Traffic Announcements (or TP, Traffic Programme). Interrupts normal programme with broadcast traffic information.
Term - This is the length of time over which you agree to repay the amount of finance you have borrowed.
TDi – Turbo-diesel injection/Turbo-direct injection, a turbocharger is a fan driven by the flow of exhaust gases that forces more air into the engine's cylinders. More air means that more fuel can be burned giving a significant increase in power and performance.
TNT – Taxed and tested, the car has current road tax and an MoT certificate.
Transponder key – The key talks electronically to the car, with complexly coded signals from embedded chips. If key and car don’t recognise each other, no-one is going anywhere.
Traction Control – see STC
Trade Value - This is how much the car is worth if sold at auction or bought by a motor dealer. Most non-prime finance companies will only lend up to a maximum of a car’s trade value.

 

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U

Understeer – When a car pushes straight on rather than reacting to turn in the desired steering direction. This is usually a trait of two-wheel drive cars.
Unsecured Loan - An unsecured loan is not secured against any asset, such as the car you have financed. This means the risks to the finance company may be higher so there may be less flexibility in the terms and conditions of the agreement.

 

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V

Variable Rate - This means that the interest rate can go up or down depending on the Bank of England’s interest rate during the term of your finance agreement. This type of finance agreement is more common in the mortgage market.
VIN – Vehicle Identification numbers. A security safeguard, individually coding each car, you will find numbers etched onto numerous components that can include body shell or windscreen.

V5 – The logbook for all British cars that is used for registration purposes – you should not buy a car without it.

VOSA - Vehicle and Operator Services Agency (VOSA), The Vehicle and Operator Services Agency (VOSA) was formed on 1st April 2003 following the merger of the Vehicle Inspectorate and the Traffic Area Network division of the Department for Transport. VOSA provides a range of licencing, testing and enforcement services with the aim of improving the road worthiness standards of vehicles ensuring the compliance of operators and drivers with road traffic legislation, and supporting the independent Traffic Commissioners.

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W

 

Warranty - Car manufacturers normally provide a warranty on new cars which will cover the cost of unexpected mechanical problems.  Warranties are also available for used cars, but do shop around.

 


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Z

ZEV – Standing for zero emissions vehicle, this is a car that produces no harmful emissions whatsoever such as an electric car.

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If you can help us identify others please email them to us to include in the Jargon Buster List.


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