| Cash-back |
If the loan quantum arranged exceeds the
purchase price of the car, the buyer will receive the balance
in the form of a cash rebate. |
| Comprehensive (insurance) |
Insurance that generally provides the widest
cover including accidental damage your vehicle, personal accident
insurance, etc. Usually the most expensive. |
| Cover Note |
A temporary document issued by the insurance
companies until the full policy document is ready for issue.
The cover note is valid for 60 days from date of issue. |
| Depreciation |
The rate at which the value of your vehicle
falls over time. Usually calculated on an annual basis by using
the following formula:
(Purchase Price less PARF benefit at end of year 10) / Remaining
Life Span of the car as defined by the COE expiry date. |
| Excess |
A term used by insurance companies that
indicates the minimum amount that the insured is responsible
for in the event of a claim for one’s own damage. |
| High-Loan |
A term used in the local market to indicate
that the loan quantum is higher than the maximum of 90% of the
purchase price. Some dealers even claim to be able to arrange
loans in excess of 100% of the purchase price of the car. |
| Insurance |
Vehicle insurance coverage is compulsory
for all vehicles and the government will not renew a vehicle’s
road tax unless the vehicle has been covered for the taxable
period. |
| Loading |
A factor used to vary the insurance premium
depending on the risk profile of the car and/or owner. Factors
that can impact your premium include but are not limited to:
1) The make and model of the car
2) The performance attributes of the car (eg, turbo-charged
cars may attract higher premiums)
3) The type of car (eg, 2 door cars (coupes) or convertibles
may attract higher premiums)
4) Age of driver (premiums may go up for extremely young or
old drivers)
5) Driving experience of the driver
6) Claims history of the driver
7) Occupation of the driver |
| NCB |
No Claims Bonus – a term used by insurance
companies for the discount in insurance premiums they extend
to drivers with good driving records and claims history. |
| Overtrade |
The amount over and above the market value
of a car that a buyer is willing to pay. This usually applies
when you are trading in a car for the purchase of another. |
| Rule of 78 |
A formula applied by car financers to determine
how much interest to rebate to the borrower in the event of
an early settlement (for example, when you sell your car). The
formula is:
R = n(n+1) x TC / N(N+1)
Where:
R - The interest rebate
n - The remaining loan period expressed in months
N – The original loan period expressed in months
TC - The total amount of interest payable over the loan period |
| Third (3rd) Party Insurance |
Insurance that covers liabilities for damage,
death and/or injury to 3rd parties only. Usually the cheapest
policy. |
| Third (3rd) Party Fire & Theft |
In addition to 3rd party cover above, also
covers accidental loss and damage by fire/theft for your vehicle. |
| Windscreen cover |
Additional coverage for the windscreen
of your car. Any claim against this cover, for example, in the
event your windscreen is damaged by a stone chip, will not affect
your no claims bonus (see NCB). |
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