Glossary
UK car trade glossary
The terms UK car dealers use every day — CAP Clean, Margin Scheme VAT, part-exchange, trade price, HPI checks. Written for people in the trade, not for consumers. Each entry explains what the term means, when it matters, and the practical judgement calls behind it.
CAP Clean
CAP Clean is the trade-valuation benchmark for a used vehicle in good, ready-to-retail condition — no paint issues, full service history, the right keys and documents, and mileage in line with the age.
CAP Average
CAP Average is the trade-valuation band for a used vehicle in honest, saleable condition with typical wear for its age — presentable enough to retail after light prep, but below the Clean benchmark.
Margin Scheme (VAT)
The VAT Margin Scheme lets UK used-car dealers charge VAT only on the profit margin of a sale, not the full selling price — provided the vehicle was bought from someone not registered for VAT or a margin-scheme seller.
VAT Qualifying
A VAT Qualifying vehicle is one where the seller holds a valid VAT invoice for the car, meaning VAT can be reclaimed on purchase and charged on resale — typically ex-fleet, ex-demo, or ex-lease stock.
Part-Exchange (PX)
A part-exchange is when a customer trades their existing vehicle in against the purchase of another, with the dealer giving an allowance for the PX that reduces the amount payable on the new car.
Trade Price
Trade price is the price a vehicle changes hands at between two dealers — significantly below retail, without VAT on the margin (when sold Margin Scheme) and without retail preparation or warranty built in.
Retail Return
A retail return is a used vehicle that didn't sell on the forecourt within the dealer's target holding period and is being moved back into trade — typically at 60 to 120 days old.
Wanted Card
A wanted card is a Lotify listing posted by a dealer to describe a vehicle they're looking for — make, model, year range, price range, condition — which other verified dealers can then respond to with matching stock.
HPI Check
An HPI Check is a vehicle-history report that tells a dealer whether a car has outstanding finance, has been written off by an insurer, is recorded as stolen, or has had mileage discrepancies — the standard provenance check in UK trade.
V5C (Logbook)
The V5C is the DVLA-issued registration document ('logbook') that records the registered keeper of a vehicle in the UK, along with its VIN, engine number, colour, and technical details. No legitimate vehicle sale happens without it.
Why a glossary?
The UK motor trade runs on shorthand. CAP Clean, Margin Scheme, PX, HPI, V5C — everyone in the trade knows what these mean, but new dealers, finance teams, and adjacent staff often don't. This glossary collects the ones that come up most often in dealer-to-dealer conversation, with definitions written by people who actually buy and sell cars, not by marketers.
Put the terms to work
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