GLOSSARY OF CAR DEALER TERMS
Cap Cost: this is the sale price you negotiate for that new car you want to lease; unless there’s a waiting list a mile long, this is not the same as the MSRP.
Certified: means the car has been cleaned and checked out by the dealer. Remember: only factory certified cars have the backing of the manufacturer.
Credit Report: a detailed explanation of your borrowing and bill-paying history, not to be confused with your… (See Credit Score.)
Credit Score: a three-digit number that expresses your creditworthiness. This number gives lenders a good idea of how likely you are to pay your bills.
“Cup Holder Factor”: Is your chosen car a good physical fit for you? Does the seatbelt hit your shoulder, or are you chewing on it? Do the seats and steering wheel adjust for your height and weight? Is there enough headroom? Legroom? Are there any blind spots? Are the controls and accessories logically placed and easy to locate? And, the inevitable, will the cup holder accommodate your double decaf grande latte? All this factors in to a good deal.
Curb Appeal: means cleaning up your car to make it look ten times better than it ever did while you were driving it—to entice potential buyers.
Dealer: Someone who is licensed to sell you a car, and abides by all the appropriate auto industry rules and regulations, or so you hope.
Dealer Cost: is the dealer invoice minus a whole bunch of stuff like incentives, environmental packages, advertising fees, and more. This is what the dealer actually paid for the car.
Dealer Invoice (Invoice): The price the dealer wants you to believe he paid for the car, when chances are, he really paid much less. (See Dealer Cost.)
Depreciation: The reduced value of the car after you buy it, or that portion of the car you “use” over the course of a lease.
The “Desk”: the sales manager
Extended warranty: This is also referred to as a service contract. It is an option you may purchase on a new, and some used cars. The extended warranty should cover car repairs over a longer period than the manufacturer’s warranty, which comes with the car. But beware: it’s a high-profit item for a dealer—cheaper ones are available online.
Four-Square Easy Sheets: easy sheets designed to combine all elements of the deal- the purchase price, trade-in, monthly payments and down payment. Don’t do it! Keep all items separate!
Holdback: An amount the manufacturer pays the dealer for each car sold of a particular make. Also referred to as a “kickback.”
Idiot- What you are if you don’t use AutoIdiot’s “Don’t Be an Idiot!” car-buying system before you buy, sell, or lease a car!
“In the Box”: In the salesperson’s cubicle.
Incentives: Money or other special deals that entice you to buy a vehicle.
Invoice (Dealer’s Invoice): The price the dealer wants you to believe he paid for the car, when chances are, he really paid much less. (See Dealer Cost.)
Lay-down: a customer who takes any deal the salesperson offers.
Leasing: is when you pay a low monthly fee to drive a fully warrantied, brand new car every two years or so, but you don’t actually own the car.
Mileage Allowance- the amount of miles per year you’re allowed to drive on a lease. Better not go over: the fees can be quite painful.
Money Factor: used for leases, this is kind of the same thing as an interest rate on a loan, only much more complicated.
MSRP: Manufacturer’s Suggested Retail Price
Options: These are extras you can have added to a standard vehicle, and usually come in packages.
Rebate: money you get back after you buy the car.
Recall: If a car model has a defect, a manufacturer may issue a “recall” notice, meaning that the defect will be fixed at the manufacturer’s expense.
Repossession: If you don’t make your car loan payments, you may get a visit from the Repo-man: the finance company that gave you the loan has every right to come and take your T-Bird away.
Residual Value: The amount a leased car is predicted to be worth after your lease is up
Rollover: this is when the dealer takes the loan from your old car and magically rolls it over into the loan for your new car. Don’t do it! You’ll be paying off two cars on the same bill!
Rustproofing: Meant to hold off body erosion, rustproofing is an unnecessary extra that a lot of car dealers push.
Salvaged or Rebuilt Title: when a car has been previously totaled, the title is marked “salvaged”. Often, these cars are dolled up and their titles are “rebuilt”, or laundered back to normal. You do not want one of these cars!
Service contract: Also called an “extended warranty,” it supplements the manufacturer’s warranty, which comes with a vehicle you purchase. A service contract is a high-profit item for the dealer. Make sure it offers substantially more than the standard warranty.
Subvent: This is when the manufacturers need to unload a certain kind of car so they inflate or “subvent” the residual value to entice you to sign up for a lease.
Target Price: the fair and reasonable price for a vehicle.
Test Drive: That’s when you take the car out for a spin- and check everything from the engine to the tires to the “Cup Holder Factor” to make sure it’s the car for you.
Title Search or Title History: gives you the lowdown on a car’s potentially sordid past. Shows a vehicle’s ownership history by using its VIN. Always do a title search if you’re buying a used car.
Upside Down: means you owe more on your car than it’s actually worth.
VIN: Vehicle Identification Number, every car’s got one.
The 5 W’s: system for advertising your car: Window (of the car), Word-of-mouth, Work (or anywhere potential buyers congregate), Wall Street Journal (really just refers to any newspaper advertisement), World Wide Web.
The Walkaround: this is when you—that’s right– walk around the car and check it out.
Warranty: is a guarantee that certain mechanical problems and body parts will be fixed if they aren’t in proper working condition. The warranty is usually limited, so make sure you know what’s included- and especially what’s not. Check online for cheaper warranties—this is a big money-maker for a dealership.