Glossary of Car Finance Terms

Here you will find a list of terms commonly used within the car finance industry with information about what they mean.

Cost of Car

The amount the car is advertised for, irrelevant of any finance options that might be available.


An amount you contribute towards the car when taking out a finance option. This reduces the total amount to finance. Some finance packages offered might come with a minimum deposit amount to qualify for the finance deal.

Dealer Contribution

Some car dealers offer a contribution towards the cost of the car if you purchase from them. This is sometimes linked to specific finance packages they are offering.

Trade-In (Part Exchange)

If you are trading in your existing car in exchange for purchasing this new car.

Balance of Cash Price (Amount to Credit)

This is the total amount you will be financing, after deducting any of the following:


The duration of the finance agreement, usually calculated in months.


Annual Percentage Rate (APR) refers to the cost you pay to borrow money expressed as a percentage of the amount you borrow.

Amount to Repay

This is the total amount you will repay within the agreement. In a PCP agreement, this amount doesn’t usually include the GFMV of the car.

Total Charge for Credit

This is the total amount you are paying in interest and fees for borrowing money to purchase the car.

Monthly Payment (no interest)

This is the amount paid each month, excluding any interest charges to repay the amount borrowed within the term.

GMFV (Guaranteed Minimum Future Value)

GMFV or GFMV is the guaranteed minimum future value the car will be worth at the end of the agreement. Generally speaking, this will be a conservative amount specified by the company offering finance, which ensures they will not be left covering any shortfall should be car be worth less than market value at the end of the agreement.

GMFV is not usually a negotiable amount with the finance provider, however, the amount may differ between different finance providers depending on how they calculate the future value of the car.

If the car has been well maintained and is good condition at the end of the agreement, it will typically be worth more than the GMFV, so bear this in mind when trading in the car at the end of the agreement in case you can get a better trade-in value elsewhere.

Monthly GFMV Interest Payment

In a PCP agreement, the GFMV works like an interest only loan. You are not repaying the GFMV amount, however you still have to repay any interest for borrowing that amount throughout the PCP term.

Take Home Price

This is the total amount the car is advertised for, including all fees and taxes associated with purchasing the vehicle.

MSRP (Manufacturer’s Suggested Retail Price)

This is price that a car manufacturer recommends it to be sold for at the point of sale. This is also sometimes referred to as the “list price” or “sticker price.”

The MSRP is designed to keep prices at the same level between dealerships, however, retailers are not required to use this price, and consumers do not always pay the MSRP when they buy a car. Vehicles may be sold for a lower price if a dealership needs to sell the car or move stock. There are also occasions when certain vehicles are in such high demand, that dealerships will sell cars above the MSRP.


A business that sells new or used cars based on a contract with a car manufacturer. Car dealerships can often keep costs down by buying cars in bulk from car manufacturers, which allows them to sell cars at more competitive prices.

Dealerships will often be able to cater for all aspects of the car manufacturer, which includes any servicing requirements and spare parts.

Sticker Price


List Price