0% finance
An interest-free loan — you repay only the amount of money you borrow. Such loans are often offered on items that manufacturers or dealers are keen to sell, perhaps because it is an unpopular model or it is about to be replaced by a new model. The deposits might be large, sometimes up to 50% of the list price of the item.
APR
Annual percentage rate. The true cost of a loan, including all the interest and concomitant charges and fees. The lower the APR is, the cheaper is the loan.
Balloon payment
The final payment at the end of a personal contract purchase (PCP).
Bank base rate
The interest rate set by the national bank. Finance houses add their own percentage to the base rate to calculate interest on loans. When the bank base rate changes, lenders’ rates change accordingly.