Glossary of terms

AFR

Advisory fuel rates. Advisory fuel rates (AFRs) can be used by employers to calculate fuel costs for tax purposes.

AMAP

Approved Mileage Allowance Payments. These are payments made to employees for the use of their own vehicle for business purposes. The AMAPs can be used to calculate the maximum amount that can be paid free of income tax to the drivers of their own vehicles

Business Contract Hire

Business contract hire funding agreements allows your business to take on a car or fleet of cars for an agreed period of time with fixed monthly payments. Agreements can range from 12 months to 4 years. You don’t own the vehicle and at the end of the term the vehicle is returned.

Business Contract Purchase

This is a finance agreement for VAT registered companies. This type of agreement allows you to own the vehicle whereby a deposit is paid at the outset followed by monthly payments over a period of time e.g. 24 – 48 months with an optional balloon payment at the end of contract to purchase the vehicle(s).

BIK (Benefit in Kind)

An item such as a company car, fuel card or private health insurance provided by an employer to an employee. This is treated as income for taxation purposes and HMRC calculate this in accordance with specific rules.

CAARS (Car Allowance Road Risk Solution)

An online risk management solution launched by ALD Automotive. Helps to manage the environmental impact of your business fleet.

CO2

Carbon Dioxide. Used in relation to vehicle emissions.

DPA (Data Protection Act)

Main piece of legislation that governs the protection of personal data in the UK.

DriveSafe

This is a programme that helps to educate drivers.

DriveMetrics Fleet Driver Risk Index (FDRI)

Lombard Vehicle Solutions Driver Coaching courses are underpinned by DriveMetrics Fleet Driver Risk Index. The assessment profiles a driver on a number of behavioural factors including: aggression, work related risk, driving excitement, ineffective coping strategies and susceptibility to fatigue.

DVLA

Driver and Vehicle Licensing Agency. The Driver and Vehicle Licensing Agency is the organisation of the UK government responsible for maintaining a database of drivers in Great Britain and a database of vehicles for the entire United Kingdom.

End of Contract (EOC)

When the lease term expires or the lease is terminated

Early Termination (ET)

Where a customer terminates their contract hire agreement before the end date

Financial Conduct Authority (FCA)

Is the conduct regulator which regulates financial services companies and markets in the UK.

Fleet Management

This solution is offer by Lombard Vehicle Solutions to allow businesses to continue to own their own fleets but provide flexibility in outsourcing some of the responsibilities of managing the fleet.

Flexi Hire

Covering temporary vehicle requirements between 1 and 6 months using PoolFleet Flexi-lease programme.

GPS Telematics

Vehicle tracking data is transmitted remotely using a mobile phone connection to capture key journey and vehicle information e.g. mileage,journey information, service reminders.

LCV

Light Commercial Vehicle

MAR

Mileage Allowance Relief. If an employee receives less AMAP, the difference can be claimed as mileage allowance relief.

MGFV

Minimum Guaranteed Future Value. This is the minimum amount a vehicle is worth at the end of an agreement.

MOT

Ministry of Transport. It’s the vehicle testing carried out by Department of Transport through approved garages to enusre your vehicle is road safe.

NIC

National Infrastructure Commission. They provide the government with impartial, expert advice on major long-term infrastructure challenges.

NMW

National minimum wage

Personal contract hire (PCH)

This ia a long term regulated vehicle rental agreement for individuals. In this type of agreement you do not own the vehicle. Fixed monthly payments are agreed over a specific time period and once the contract is complete the vehicle is returned.

Personal contract purchase (PCP)

This type of agreement is for an individual where you’ll pay an initial deposit followed by a series of monthly payments which basically cover the depreciation of the vehicle. At the end of the contract term there is the opportunity to purchase the vehicle known as a balloon payment.

PoolFleet Solutions

PoolFleet is a comprehensive, flexi-lease programme for hire periods between 1 and 6 months.

ProFleet2

An in-vehicle telematics system that captures key journey and vehicle data is transmitted remotely via the mobile network with secure reporting for drivers and fleet managers available.

Salary Sacrifice

This type of funding solution is where businesses can lease vehicles through Lombard Vehicle Solutions using an agreed car policy with enhanced fleet discounts. The costs are then reimbursed in full by the employee via a monthly 'salary sacrifice', providing savings on both tax and NI.

Sale and Leaseback

This type of option is where Lombard Vehicle Solutions can simply, purchase a your existing vehicles for an agreed value and lease them back to a you for varying contract lengths.

Total Cost of Ownership (TCO)

This is a financial estimate intended to help businesses determine the direct and indirect costs associated with their vehicles. 

Threesixty

Fuel deduction management programme operation by Lombard Vehicle Solutions. Availability of this service is subject to fleet size and status.

VAT

Value Added Tax. The standard rate of VAT is 20%.

VED

Vehicle Excise Duty