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Customer FAQ

Important terms − the Glossary

With Alphera it has never been as easy to finance the car of your dreams. Should you still have any questions – you'll find the answers here.

Additional expenses

These expenses are paid by the owner if a vehicle is financed and by the lessee if it is leased. They particularly include maintenance costs, repairs and insurance premiums.

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Broker (or Arranger)

An entity that arranges for the sale or lease of vehicles through another party.

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Calculation

Calculations are carried out by applying the annuity method as a basic principle. The acquisition costs, loan amount, unscheduled payment, down payment, term of the contract, interest and any residual values calculated etc. are the operands for finance and lease.

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Contract extension

It is possible to extend the contract by mutual consent. But it is not permitted to exceed the maximum term of contract permitted. Amounts must be recalculated to determine the "new" monthly instalment.

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Cost of ownership

When a vehicle is financed or leased, the costs of ownership (e.g. for fuel, oil, car washing) must be borne by the borrower or lessee.

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Credit check

The credit check serves to guarantee that the borrower or lessee will be able to meet his financial commitments throughout the term of the contract. It is a part and parcel of proper contract processing.

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Creditworthiness

The ability of a borrower to pay his total debt.

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Current market value

The value of your vehicle at today's market price.

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Direct debiting system

If the customer grants the bank or leasing company permission to collect the receivables due in each case by direct debit, the monthly instalments will be automatically collected from the lessee's/borrower's bank account.

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Documentation fee

A fee charged by some dealerships (who may call it a dealer documentation fee) or other lessors to cover the cost of preparing lease documents.

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Early termination

Ending of the lease/loan before the scheduled termination date for any reason, voluntary or involuntary (for example, you return the vehicle early or default on the lease/loan, or the vehicle is stolen or totaled). In most cases of early termination, you must pay an early termination charge.

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Equity

In an instalment sale or loan, the positive difference between the trade-in or market value of your vehicle and the loan payoff amount. When the loan is paid off, the equity is the market value of the vehicle.

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GST (Goods and Services Tax)

Goods and services tax (GST) is a tax on most goods and services in New Zealand, most imported goods, and certain imported services. GST is added to the price of taxable goods and services at a rate of 15%.

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Gross capitalized cost (Gross cap cost)

The agreed value of the vehicle at the time you lease it, which generally may be negotiated, plus any items you agree to pay for over the lease term (amortized amounts), such as taxes, fees, service contracts, insurance, and any prior credit or lease balance.

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Guarantee

Possible method of providing cover for credit/loans. This involves a contract usually only obliging one party in which the guarantor promises the creditor of another (the principal debtor) that he/it will accept responsibility that the current or future obligations of this person are met.

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Identity check

The identity and signing powers of the customer and, if applicable, his power of representation must be ascertained on the basis of his personal identity card, passport, extract from the commercial register or trade registration before the contract is signed.

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Insolvency

Refers to the inability to meet one's financial commitments and, in addition to over-indebtedness, is the reason for bankruptcy and composition proceedings. If the borrower/lessee becomes insolvent, the financing company may instantly terminate the loan/leasing agreement, declare all the outstanding loan/lease payments discounted and due for payment and impound and then sell the loan/leased item. The sales proceeds − less the creditor’s own and third-party recovery expenses − are deducted from the borrower's/lessee's residual debt called due.

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Interest

Fee paid to the bank for granting a loan. The disclosure of the interest as an effective annual interest rate is required by law in this connection.

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Late payment

A payment received after the specified due date. In most cases, a payment made after any grace period triggers a late charge.

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Legal basis

The most important legal provisions and regulations on which car insurance contracts are based.

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Lien

Legal claim or charge against property for the satisfaction of a debt.

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Loss of use

If you cannot use your own vehicle for a certain period after an accident which you are not at fault for (third-party liability damage), e.g. while it is being repaired, compensation is usually paid per day for the loss of use. The daily rate depends on the vehicle type.

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Monthly payment

The monthly payment is the term used to refer to the amount that the customer owes the bank or the leasing company each month. The monthly finance payment is calculated based on the financing method, the vehicle model, the term of the contract, any down payments and, if applicable, the residual value and the mileage. The most important parameters for the level of the monthly lease payment are the vehicle model, the term of the contract, any unscheduled payments, the residual value and the mileage.

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Net loan amount

Also referred to as amount paid out. The amount which is actually made available to the customer.

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New vehicle

Vehicle without any mileage or registration.

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Normal wear and tear

The minor and reasonable wear a vehicle endures during everyday, ordinary operation. Normal wear and tear can include things like small door dings, paint scratches or stone chips.

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Ownership

Is the exclusive right to or control over a vehicle: it is also referred to as having title. When two people own the same vehicle, it is called co-ownership

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Rebate

An amount that may be offered by a manufacturer, dealer, lessor, creditor or assignee that may be paid to you separately or credited to your lease/loan/insurance agreement.

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Recommended retail price

Manufacturer's suggested retail price, sometimes called the "sticker price".

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Registration fee

A fee charged by a state motor vehicle department to register a vehicle and authorize its use on the public roadways.

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Residual value

The end-of-term value of the vehicle established at the beginning of the lease and used in calculating your base monthly payment. The residual value is deducted from the adjusted capitalized cost to determine the depreciation and any amortized amounts. It is an estimate that may be determined, in part, by using residual value guidebooks. The residual value may be higher or lower than the realized value at the scheduled end of the lease.

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Residual value guidebooks

Publications used, in part, by some lessors and assignees to establish vehicle residual values.

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Security deposit

An amount you may be required to pay, usually at the beginning of the lease/loan, that may be used by the lessor, creditor or assignee in the event of default or at the end of the lease/loan to offset any amounts you owe under the lease/loan agreement. Any remaining amount may be refunded to you.

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Self-disclosure

The disclosure of information about oneself serves to assess the financial circumstances of the applicant when he applies to finance or lease a vehicle. In this connection, a distinction is made between information disclosed by private or business customers. If a private individual supplies information on himself, he provides particulars on himself, his income, his work and living situation. Self-disclosure by business customers involves the customer providing detailed information on his company, e.g. about a balance sheet.

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Subsidy

A programme or plan in which certain items are subsidized by the manufacturer, the finance company, the lessor or the assignee.

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Temporary licence plate

This is the term for a licence plate used for test drives and journeys to deliver vehicles. It is issued by the registration office if documentation of a third-party liability insurance is presented.

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Term/repayment period/duration

Describes the duration of the contract. A specific term is agreed for financing and leasing which is an important parameter for calculating the monthly payments. With leasing, the term is based on tax regulations and the reasonable economic lifetime of the leased item. Terms under one year are not possible for tax reasons.

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Termination

Declaration of intent by a party to a contract that it is intended to end a permanent debt obligation (e.g. loan or leasing agreement). It becomes legally effective once the other party to the contract receives it and is not generally bound to any legal form. Legal regulations apply to leasing and loan agreements.

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Terms/conditions

Description of the individual terms of products or services. Besides price terms, other terms are defined in the Standard Terms and Conditions of Business for leases and finance.

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Title

Legal document that identifies the owner of the vehicle. The lessor, creditor, or assignee, not you, holds title to the leased vehicle.

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Total contractual obligation (Total amount of loan)

The sum of the capitalized cost reduction, the total of base monthly payments, and other charges due under the lease/loan agreement. The total contractual obligation excludes any security deposit as well as sales taxes and any other fees and taxes paid to a third party. If the total contractual obligation exceeds $25,000, the Consumer Leasing Act does not apply.

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Total loss / write off

If after an accident the estimated repair costs exceed the replacement value of a vehicle so that repairing it does not appear financially advisable, the replacement cost for an equivalent vehicle is compensated instead of the repair costs. In the process, the residual value of the vehicle involved in the accident is deducted.

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Total monthly payment

The base monthly payment plus monthly sales or use taxes and any other monthly charges.

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Total of payments

The sum of the periodic payments, the end-of-term disposition fee, any other charges, and all amounts due at lease signing or delivery, minus refundable amounts such as a security deposit and any monthly payments included in the amount due at lease/loan signing or delivery.

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Trade-in

The net value of your vehicle credited toward the purchase or lease of another vehicle. If you own the vehicle being traded in, you sell it to the dealer or lessor. If you are leasing the vehicle being traded in, you are turning in the vehicle (either at the scheduled end of the lease or upon early termination) to the dealer or lessor who has agreed to pay any remaining balance on your agreement. The amount credited may be positive or negative, depending on the agreed-upon value of the traded-in vehicle and any remaining balance on your agreement.

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Used-car guidebooks

Publications that report current wholesale and (or) retail prices of vehicles. Wholesale values are generally determined from such factors as auto auction prices, other wholesale transactions, and regional demand. Prices are listed according to year, make, model, options, mileage, and condition of the vehicle. Retail prices are generally determined by such factors as dealership retail sales prices, other retail transactions, and regional demand.

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