Car buyer's glossary: Philippine car terms from A to Z

How to use this glossary

Car shopping here has its own vocabulary: finance jargon, LTO acronyms and spec-sheet shorthand. Terms are grouped by letter, and where one has a specific legal meaning, we name the law.

A to B

• ABS (anti-lock braking system) — Stops the wheels from locking under hard braking so you can still steer.
• Acts of Nature (AON) — Insurance add-on that covers damage from typhoons, floods, earthquakes and similar events. Standard own damage cover usually excludes them.
• Add-on rate — A loan rate charged once on the full amount for the whole term. A 60-month add-on rate of 31% is not 31% a year.
• ADAS (advanced driver assistance systems) — Electronic aids such as automatic emergency braking, lane keeping assist and adaptive cruise control.
• AEB (autonomous emergency braking) — Brakes the car on its own if the sensors detect a likely collision.
• All-in downpayment (all-in DP) — A promo that rolls the downpayment, chattel mortgage fee, first-year insurance and sometimes registration into one upfront payment.
• Amortization — Your fixed monthly loan payment, covering both principal and interest.
• AT / MT — Automatic transmission and manual transmission.
• AWD — All-wheel drive. Sends power to all four wheels automatically as grip requires.
• BEV (battery electric vehicle) — Runs only on a traction battery. Exempt from the automobile excise tax under the TRAIN law and from number coding under RA 11697.
• Body-on-frame — A body bolted onto a separate ladder frame, used in pickups and SUVs like the Fortuner and Montero Sport. Tough, but heavier than a monocoque.

C

• CBU / CKD — Completely built-up (imported whole) and completely knocked-down (assembled locally from kits).
• Chattel mortgage — The mortgage on your car that secures the loan. It is registered with the Land Registration Authority under RA 11057 and annotated on your CR until you pay off.
• Comprehensive insurance — Optional cover for damage to or theft of your own car, plus higher third-party limits. Banks require it during the loan.
• Conduction sticker — The temporary identification number on a new car before its plates are issued.
• CR (Certificate of Registration) — The LTO document that identifies the car and its owner and shows any mortgage annotation.
• Crossover — An SUV-style body built on a car platform. Higher seating than a sedan, lighter than a body-on-frame SUV.
• CTPL (Compulsory Third Party Liability) — Mandatory insurance for registration. Covers death or injury to third parties, not damage to any car.
• CVT (continuously variable transmission) — An automatic without fixed gear steps. Smooth and efficient in traffic.

D to E

• DCT (dual-clutch transmission) — An automated gearbox with two clutches. Quick shifts, but some feel jerky at crawling speeds.
• Depreciation — The drop in a car's value over time. Insurers also apply it to replacement parts on older cars.
• Displacement — Engine size in liters or cubic centimeters. A 1.5L engine is about 1,500 cc.
• Downpayment (DP) — The part of the price you pay upfront. The lender finances the rest.
• e-Power — Nissan's series hybrid system. The gasoline engine only generates electricity, and an electric motor drives the wheels.
• EIR (effective interest rate) — The true yearly cost of a loan. Lenders must disclose it under BSP Circular No. 730.
• Emission test — The test at a Private Emission Testing Center (PETC) required before you renew your registration.
• EWD (early warning device) — The reflective triangle you set behind a stalled car. Keep one in the trunk.
• Excise tax — Tax on new cars under the TRAIN law (RA 10963): 4% up to ₱600,000 net selling price, 10% up to ₱1 million, 20% up to ₱4 million and 50% above that. Hybrids pay half; pure EVs and pickups are exempt.

F to H

• FWD / RWD — Front-wheel drive and rear-wheel drive.
• Ground clearance — The gap between the lowest part of the underbody and the road, in millimeters. It matters on flooded streets and rough provincial roads.
• GVW (gross vehicle weight) — The maximum loaded weight of the vehicle. The LTO uses it to set the MVUC.
• Horsepower (hp) and PS — Units of engine power. One PS is slightly less than one hp, so PS figures read a bit higher.
• Hybrid (HEV) — A car with a gasoline engine plus an electric motor and battery, charged by the engine and by braking. No plug needed.

I to L

• In-house financing — A loan from the brand's finance arm or a financing company the dealer works with, instead of a bank.
• ISOFIX — Standard anchor points for child seats.
• Lemon Law (RA 10642) — Protects buyers of brand-new cars with defects that keep coming back within 12 months or 20,000 km.
• LTFRB — Land Transportation Franchising and Regulatory Board. Issues franchises for public transport, including ride-hailing (TNVS).
• LTMS (Land Transportation Management System) — The LTO's online portal for licenses and vehicle registration.
• LTO — Land Transportation Office. Registers vehicles and licenses drivers.

M to O

• Mild hybrid — A small electric motor that assists the engine. It can't drive the car on electricity alone.
• Monocoque (unibody) — Body and frame built as one structure, used in sedans, hatchbacks and crossovers.
• MPV (multi-purpose vehicle) — A people carrier, usually with three rows, such as the Xpander or Innova.
• MVUC (Motor Vehicle User's Charge) — The main registration fee, set by RA 8794 and based on vehicle type and weight.
• Number coding (UVVRP) — The MMDA scheme that keeps cars off major Metro Manila roads during set hours one weekday a week, based on the plate's last digit.
• OR (Official Receipt) — The LTO receipt for your registration payment, showing when the registration expires.
• OR/CR — The Official Receipt and Certificate of Registration together. Keep copies in the car.

P

• Participation fee — The amount you pay out of pocket each time you make an insurance claim.
• PETC (Private Emission Testing Center) — An LTO-accredited shop that runs the emission test.
• PHEV (plug-in hybrid) — A hybrid with a bigger battery you charge from an outlet. It can run some distance on electricity alone.
• Pickup — An open-bed utility vehicle like the Hilux or Ranger. Treated as a truck and exempt from the automobile excise tax under the TRAIN law.
• PMS (preventive maintenance service) — Scheduled service at the intervals in the owner's manual or warranty booklet.
• PMVIC (Private Motor Vehicle Inspection Center) — A privately run center that checks roadworthiness for registration where required.
• PRMIS — The LTO's plate and registration system for new vehicles. No registration, no plate, no release.

R to S

• Reservation fee — A payment to hold a unit, usually credited to the downpayment. Ask whether it is refundable.
• RFID — The windshield sticker for cashless tolls: Autosweep on San Miguel tollways such as SLEX and Skyway, Easytrip on Metro Pacific tollways such as NLEX and CAVITEX.
• RON (research octane number) — The gasoline grade at the pump, such as 91, 95 or 97. Use what your manual specifies.
• SRP (suggested retail price) — The brand's list price. Dealers may discount it.
• Sum insured — The value your comprehensive policy covers, and the most it pays on a total loss.
• SUV (sport utility vehicle) — In the Philippines, usually a body-on-frame 7-seater like the Fortuner, Montero Sport or Everest.

T to Z

• TNVS (transport network vehicle service) — Ride-hailing. Requires an LTFRB franchise.
• Torque — The engine's twisting force, in newton-meters (Nm). More low-rpm torque makes pulling away with a full load easier.
• Turbo — A turbocharger, which uses exhaust gas to push more air into the engine for more power.
• Variant — A version of a model with its own equipment and price, such as a base, mid or top trim.
• VIN (vehicle identification number) — The car's unique 17-character ID, also called the chassis number. Match it with your papers on release day.
• Warranty — The manufacturer's promise to fix defects for a set time or distance. Keep your PMS records to protect it.
• 4x2 / 4x4 — Two-wheel drive or four-wheel drive. Many 4x4 pickups use a part-time system you engage when needed.