This topic covered Finance Structures and Profiles.

  • A tri-partite transaction describes a finance agreement where there are three parties involved in the provision of a financed vehicle.
  • A `balloon payment` is a large payment that is normally made at the end of a finance agreement. It is also referred to as a lump sum and is a portion of the capital cost/value of the vehicle that the customer is not paying for within the regular payments that they make to the finance company.
  • Personal Contract Purchases refer to the Balloon as the Guaranteed Minimum Future Value (GMFV)
  • Advance Rentals/Payments is the term used when payments are made by the customer to the finance company `in advance` of a fixed period in time.
  • A terminal pause is a period at the end of an agreement (usually a lease agreement) where no payments are required to be made by the customer.
  • Spread Rental is a term that reflects a specific payment profile of a finance agreement. It is very common in lease agreements. It uses the `terminal pause` period of a finance agreement and allows payments to be made during this time.