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Don’t blind your customers with jargon when selling finance

New research has revealed that there is confusion when it comes to terminology surrounding car buying; one third think that balloon payment is a made up term, and one in nine think that PCP is a type of sexually-transmitted disease.

The study by Admiral Car Finance polled almost 2,500 people, questioning them on their knowledge of car finance terminology.

Participants were asked to choose the best definition for a number of terms when given three possible options, but were unaware of the purpose of the study.

The first car finance term respondents were presented with was ‘HP’, to which just one third (32%) were able to correctly identify it as ‘hire purchase’ whilst the remaining 68% were unable to guess correctly.

As many as 24% of respondents incorrectly identified PCH as an hallucinogenic drug, whilst 42% thought that it meant ‘private car hire’. Just 20% correctly identified it as ‘Personal Contract Hire’, and the remaining 15% thought it was a made-up term.

When presented with the term ‘balloon payment’, 34% stated that they thought it was made up, whilst 9% believed it was the term used when hiring a clown. Just 27% were able to correctly identify that the phrase refers to the final lump sum paid at the end of a contract.

Some of the other most commonly misinterpreted phrases:


  • MSRP (Manufacturer’s Suggested Retail Price) – a food additive (32%)
  • GFV (Guaranteed Future Value) – gluten free vegans (23%)
  • PCP (Personal Contract Purchase) – a sexually transmitted disease (11%)
  • APR (Annual Percentage Rate) – London-based football club (6%)

Of those questioned on the high street on their knowledge of car finance terminology, not a single person was able to correctly describe every term.


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