Car lease glossary

A

Depreciation
Depreciation is the accounting term for the depreciation of company assets. Depreciation occurs, among other things, due to the aging of inventory and/or objects, declines in prices, irreparable or uninsured damage or, finally, due to the irrecoverability of claims. In accounting terms, the most used depreciation methods are linear and annuity. Mathematically, depreciation is the difference between the investment and the calculated residual value.

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APK
General Periodic Inspection. The MOT is a legally required inspection in Europe to promote road safety and also to protect the environment. In the Netherlands, the inspection requirement is described in the Road Traffic Act 1994, which states that passenger cars, company cars, tricycles or trailers with a maximum of 3,500 kg must be inspected every year or every two years. Heavy trailers and company cars must pass an MOT every year. Despite the MOT, it is important to maintain and check a vehicle regularly.

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Leasing a car
When leasing a car, the renter's right to use a car is provided for a pre-agreed period and for a fixed fee (car lease rate). Car leasing is a long-term version of car rental. There are different forms of car leasing; short lease, long term lease and full operational lease.

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Company car
A passenger car or company car provided by employers is a company car. The employer pays (for the most part) for the company car. The company car is used for business purposes.

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Rent a car
It renting a car is using a car from a rental company (usually a car rental company) in exchange for a fee. The amount to be paid is called rent. At VWP Shortlease, you can also rent a car from one month!

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Car hire
Car hire is an agreement where a renter uses a car (owned by a car rental company) in exchange for a fee. This fee is the rent.

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Car lease
In the case of car leasing, the right to use a vehicle is provided to a renter for an agreed period for a fee (the lease rate). There are various forms of car leasing, including: car rental, short lease, long term lease, full operational lease.

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Car leasing company
A car leasing company is a company that professionally deals with car leasing and fleet management.

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Car rental
When renting a car an agreement is concluded where a renter uses the car from a rental company (usually a car rental company) for payment of a fee.

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Car rental company
A car rental company is an organization that rents cars. It is hereby agreed that a renter will use a car from the car rental company for a pre-determined fee (the rental).

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B

Company car
One company car is a car that is used by a company to carry out business activities.

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Company car
These vehicles are generally provided to employees to help them perform their tasks, such as visiting customers, delivering goods, or performing other work-related tasks. This includes electric company cars and electric short lease cars.

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Company car lease
Bee company car leasing is provided with the right to use a car to a tenant for a fixed fee (the lease rate) for an agreed period. The car is used to carry out business activities.

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Company car lease
In the case of company car leasing, the right to use a vehicle (van, truck or passenger car) is provided to a tenant at a fixed rate (lease rate) and for an agreed period. The company car is used for business purposes.

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Delivery van
A delivery van is a vehicle weighing up to 3,500 kg and is intended for transporting goods. A delivery van is also known as a van. In the automotive industry, vans and vans are also known as “small gray” or a “car with a gray license plate”.

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Van
A delivery van is a vehicle that is intended for transporting goods. A van is also known as a van.

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Van rental
A delivery van is a vehicle that is intended for transporting goods. You can rent a van with a car rental. You then pay an amount (rent) to be able to use the car for an agreed period.

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Van
A van is a vehicle with a maximum weight of 3,500 kg. In addition, the van is specially equipped for transporting goods. In the automotive industry, vans are also known as a “car with a gray license plate” or “small gray”. A van is also known as a delivery van.

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Van rental
A van is a vehicle with a maximum weight of 3,5000 that is specially equipped and used for transporting goods. You can rent a van with a car rental. You then pay an amount (rent) to be able to use the car for the agreed period.

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Van lease
When leasing a van, a leasing company van is used by a tenant for a fixed lease period and for a fixed lease rate.

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Car lease addition
When a lease car can be used for private trips in addition to business trips only, the tax authorities see this as income in kind. The addition of the lease car is a certain percentage of the list value that the lessee must add to their income for income tax purposes. At VWP Shortlease, you can easily search for a car by addition class.

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Book value
The book value is the determined value of the car at a given time during the contract period of the lease contract. The book value depends, among other things, on the depreciation of the car and the leaser's investment.

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BPM
BPM stands for the Act on the “Taxation of Passenger Cars and Motorcycles”. The BPM is a tax that applies to every motorcycle registered in the Netherlands. BPM must also be paid for all motorcycles not registered in the Netherlands that a Dutchman drives on the road in the Netherlands. When you have a leased car, you pay the BPM to the car leasing company. They invoice the BPM and pay it to the importer, who pays the BPM to the tax authorities.

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Fuel Pass
A fuel card is an identification card provided by the car leasing company that instructs fuel card companies to deliver fuel to the driver of the lease car. Common fuel cards include the Travel Card and Multi Tank Card. With these fuel cards, you can go to almost all petrol stations in the Netherlands.

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C

Captive leasing company
A leasing company that is linked to one car brand. Leasing this car brand is then a way to increase the car brand's sales.

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Contract duration
The contract duration is the period of time between the start date and the end date of a lease contract. The contract duration is usually expressed in months, for example 1, 3, 6, 12, 14 or 18 months. The contract duration is also known as the term.

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Contract takeover
A contract concluded by third parties, from which the rights and obligations are assumed. When a contract is taken over, this always includes the transfer of ownership of leased vehicles that are in rented condition. This contract takeover requires a three-party agreement and full billing.

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D

Daily value
The daily value is the economic value of a vehicle at the time just before the damage. The daily value is the amount you would have received at that time when selling.

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E

E.C.E. Standard
E.C.E. stands for Economic Commission Europe and is the standard for a car's fuel consumption.

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Deductible
The deductible is the damage that is not recoverable from the insurance. The amount of the deductible is previously agreed with the insurer. Do you want to know what the deductible is? Click here to go to the explanation of the amount of the deductible.

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Energy label
An energy label is used to indicate the energy consumption of a product. In cars, both fuel consumption and CO2 emissions per kilometer are measured. These are two criteria that show the relative economy of the cars. This makes it possible to compare the energy consumption of cars of the same size.

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F

Financial lease
Financial lease is a non-cancellable financing agreement, where the term is equal to the expected economic life of the lease object. The lease object is available to the tenant and he is obliged to fully reimburse the investment made by the leasing company. There are two legal features of financial leasing. First, the leasing company is legally the owner of the lease object. After payment of the established lease terms, legal ownership goes to the tenant.

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Tax addition
A tax addition occurs when your lease car (which is made available by the employer) is also used privately. The employee's tax income is then increased by an amount determined by the tax authorities. For lease drivers, it is important to know exactly how high the addition is in order to be able to estimate the costs.

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Full service lease
Full service car leasing is the most comprehensive form of leasing: full operational lease. In the case of a full service lease, the car lease rate includes additional services such as maintenance, insurance and any replacement transport.

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G

Calculated residual value
The economic residual value of an object, which is used in a lease calculation.

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Yellow/Grey license plate
In the past, the registration certificate for a passenger car was yellow and that of an order/truck was grey. This historical distinction still makes a difference between a passenger car and an order/truck.

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GVW
GVW stands for Gross Vehicle Weight. This term stands for the maximum gross weight of a car. It is the sum of the weight of an empty car and the maximum load capacity allowed.

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H

Commercial value
The commercial value is the value of the car that applies in free trade.

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Recalculation
If there are interim deviations from the agreement, a recalculation of the lease agreement will be made.

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HSB
HSB stands for Holdership Tax. This is a tax that a license plate holder must pay for owning a motor vehicle. The official name of this tax is “motor vehicle tax”.

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Hybrid short lease car
A hybrid short lease car is a vehicle that uses both a fossil fuel-based combustion engine and an electric engine. These two power sources work together to improve vehicle performance while reducing greenhouse gas emissions.

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I

Individual lease agreement
A lease contract is also known as the individual lease agreement. This is the agreement between the leasing company and the tenant of the lease object.

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Intake damage
If there is damage while returning the car, but it is not reported to the leasing company or insurer, this is referred to as loss.

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J

Legal ownership
The most comprehensive right that a (legal) person can have is property. An owner has the authority to sell a lease object and, after payment of the purchase price, give ownership to the buyer.

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K

Mileage billing
The difference between the agreed and the actual number of kilometers driven is usually made on an annual basis. In any case, this settlement takes place at the end of the lease period, but is also often provided annually.

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Purchase option
The person who leases a car has the option to purchase the lease car at the end of the lease period. The price of the lease car was determined when the lease agreement was entered into.

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Car lease costs
The costs for a lease car are a fee that a lessee must pay on a periodic basis to the leasing company for a lease car and the associated additional services included in the lease contract.

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L

Lease
Lease is a form of utility-related financing. When leasing, (sustainable) production assets (such as cars and machines) are purchased by a leasing company that then makes the production asset available for a monthly fee.

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Leased car
A lease car is a car that is available to a lessee at a fixed lease rate and for a lease fee that must be paid to the leasing company. A lease car often requires a personal contribution, also known as an addition.

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Leasing contract
The contract that is made between a leasing company and a lessee during a lease period. This lease contract is also known as an individual lease agreement. A full operational lease contract usually lasts 60 months. A lease contract shorter than 12 months is called a short lease.

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Leasing
Leasing a car (or other sustainable utensil) for a long period of time. Each month, the lessee pays a fixed lease rate for the utensil to the leasing company.

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Lease company
An organization that provides lease cars by means of a lease structure. Here, the car is made available to a tenant for whom they pay a (monthly) fee to the leasing company.

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Lease prices
The lease price is a fee that the lessee must pay on a periodic basis for the lease car and the additional services included in the lease contract.

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Lease rates
The lease rate is the fee that the lessee must pay to the leasing company on a periodic basis for the lease car and the additional services included in the lease contract.

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Lease scheme
The lease arrangement falls within the decision of the Secretary of State for Finance. This regulation specifies the minimum criterion that lease agreements must meet in order to qualify as an operating lease for tax purposes.

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Leasing
Leasing is a collective name for all forms of financing focused on an object. An asset is made available by a leasing company to a tenant for a certain period of time. This always involves a periodic payment. There are two main forms of leasing. For example, people speak of financial leasing when financing comes first when entering into the lease agreement. When the use of a lease object comes first instead of financing, this is called operational leasing.

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Lessee
De Lessee is also known as a lessee. This is the person who enters into the lease agreement and will therefore make use of the lease object.

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Lessor
The lessor is also known as a lessor. This is the leasing company.

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MR

Master agreement
Within this agreement, the general terms and conditions and the most important special terms and conditions of future lease contracts are agreed in advance by the lessee and the leasing company.

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Margin
Margin refers to the difference between the contract interest (sales) and the funding rate (purchase).

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N

NAP
NAP stands for National Auto Pass. This is an authority in the Netherlands that registers car mileage. These mileages are stored in a database and can be requested by all participating car companies.

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Negative interest rate
When the contract is interrupted and depreciated linearly and too little interest has been paid, this is called negative interest.

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Net operating lease
This form of leasing is an operational lease that only includes interest and repayment. The fair residual value is used here. This type of lease usually has no additional service components.

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O

Off balance financing
When an entrepreneur opts for operational leasing, he opts for a form of financing that means that the entrepreneur does not have to include that investment on the balance sheet.

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Operational lease
Operational leasing is a service where a lease car is used by the leasing company to a lessee. To do this, the lessee must pay agreed fees for as long as the contract runs.

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Overlock
A current lease agreement is replaced by a new lease agreement. This is called overlocking.

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P

Passenger car
When concluding a lease contract, both a passenger car and a company car can be leased. With a short lease, for example, you lease a passenger car for less than twelve months.

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R

Remaining value guarantee
This guarantee includes the guaranteed residual value that has been promised to the leasing company.

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ROB
This abbreviation, Repair, Maintenance and Tyres, is part of the lease calculation. This amount is often expressed in cents per kilometer.

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RTL
RTL means Registration and Name of Leased Vehicles. This organization is a help register for naming lease cars. RTL allows leasing companies to register vehicles in the RDW license plate register in the name of the lessee or his or her directors. In addition, leasing companies can assume certain license plate holder obligations that are normally part of the lease agreement, such as the MOT.

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S

Sale and lease back
When a customer or a driver sells a car to a leasing company and then leases it back immediately, this is called sale and lease back.

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Short lease
Short lease is a lease variant for a short period of time. When leasing a car, short lease means that it involves a lease period of at least one to a maximum of 24 months.

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Short lease
Shortlease is a form of lease for a short period of time. The short lease period ranges from one to 24 months. Shortlease, for example, is a suitable lease form for small entrepreneurs who do not want to take much financial risk, or for companies that work on a project basis. VWP Shortlease is a well-known provider of short lease cars.

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Short lease occasion
One short lease occasion is a flexible form of lease where you can rent a car for a relatively short period of time. Unlike traditional leases, which usually last several years, short leases can range from one month to two years. With a used car, you get a young used car, and this makes it even cheaper!

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Standstill control
If lessees temporarily do not need their lease car, the leasing company can temporarily store the lease car without terminating the contract. This is called a standstill control.

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SEPA
SEPA stands for “Single Euro Payments Area” and translated to Dutch means “One European Payment Area.” It is an initiative by the European Union to simplify and standardize payment transactions within Europe.

The main goal of SEPA is to make cross-border payments within Europe as easy and efficient as domestic payments. This promotes economic integration and makes life easier for both individuals and companies.

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T

Tachograph
A tachograph is a device that records data from lease cars, such as the duration, length and progress of car journeys.

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Tender
A potential lease customer requests several leasing companies to offer them a quote based on certain conditions that the potential customer has. This request is called a tender.

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Y

Universal leasing company
A universal leasing company is a company that leases all car brands. This universal leasing company is opposed to a captive leasing company, because it is linked to one specific car brand.

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V

Vendor
When a supplier or importer markets its products combined with a lease offer, this is called a vendor. This often involves the use of your own leasing company.

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Vendor lease
If the customer of a lease car is a customer of both the lease car supplier and the leasing company, this is called Vendor lease.

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Rentals
People speak of renting for example, when a car is used by a renter for a certain period of time for a periodic payment.

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FROM
The abbreviation VNA stands for Association of Dutch Car Leasing Companies. This branch wants to promote the further development of car leasing and professional fleet management in the Netherlands. This organization also ensures the common general interests of all members.

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Z

Property damage
Property damage is also known as hull damage. This is damage that has occurred to the lease car or other material items.

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Business car
A business car is often a passenger car that is registered to a legal person or that is registered to a person who uses the passenger car for business at least 50%.