Finance
Glossary

The yearly cost of borrowing money, including interest and additional fees, expressed as a percentage.

A form of lending where the vehicle being purchased serves as security for the loan.

A large final payment due at the end of a loan term, typically 25-50% of the vehicle's original value.

The estimated value of a vehicle according to industry valuation guides like RedBook or Glass's Guide.

A business loan where you own the vehicle immediately but the lender holds a mortgage over it as security.

A rate that includes the interest rate plus most fees and charges, designed to help compare loans.

Australian law that regulates credit providers and protects consumers in credit transactions.

A period (usually 5 business days) where you can cancel a credit contract without penalty.

A numerical rating (0-1200 in Australia) that represents your creditworthiness based on your credit history.

Finance arranged through a car dealership, often with partnerships with banks or finance companies.

An upfront payment made when purchasing a vehicle, typically 10-20% of the purchase price.

A fee charged when you pay out your loan before the contract term ends.

The difference between what your vehicle is worth and what you owe on it.

A professional who searches multiple lenders to find suitable finance options for your situation.

An interest rate that remains the same throughout the loan term.

Insurance that covers the difference between insurance payout and loan balance if your vehicle is written off.

A 10% tax on most goods and services in Australia, including vehicles and finance charges.

A guaranteed minimum value set by the manufacturer for your vehicle at the end of a lease or PCP agreement.

A finance arrangement where you hire the vehicle with an option to purchase at the end for a nominal amount.

The cost of borrowing money, expressed as a percentage of the loan amount per year.

A rental agreement where you use the vehicle for a set period and return it at the end.

The percentage of the vehicle's value that you're borrowing, calculated as loan amount divided by vehicle value.

A regular fee charged each month for loan administration, typically $5-15 per month.

When you owe more on your loan than your vehicle is currently worth.

A three-way agreement between you, your employer, and a finance company for a vehicle lease.

Finance where you pay for the vehicle's depreciation plus interest, with a large final payment option.

Preliminary approval for finance before you choose a specific vehicle, showing your borrowing capacity.

The original amount borrowed, or the remaining amount owed on a loan.

The ability to withdraw extra payments you've made on your loan.

Replacing your existing loan with a new loan, typically with better terms or rates.

The estimated value of the vehicle at the end of the loan or lease term.

A loan where the vehicle serves as collateral, allowing the lender to repossess if you default.

The length of time you have to repay the loan, typically 3-7 years for vehicle finance.

The amount a dealer will pay for your current vehicle when purchasing a new one.

A personal loan not secured by the vehicle, based solely on your creditworthiness.

An interest rate that can change during the loan term based on market conditions.

Insurance that covers mechanical repairs after the manufacturer's warranty expires.