Car Loans Glossary

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• Minimum Guaranteed Future Value

  Minimum guaranteed future value (MGFV) is a phrase that crops up in personal contract purchases, and is sometimes known as guaranteed future residual value. At the end of the contract, the minimum guaranteed future value is the guaranteed minimum that your car will be worth.

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• Negative Equity

  If the amount of money you owe on a car is more than the car is worth, this is known as negative equity. This is a rather bad thing because even if you sell the car on, you will still be left owing the money on the loan which you can’t cover with the sale of the car. No car, still in debt? Be in no doubt that you want to avoid negative equity.