Here is a guide to some of the common phrases you may encounter in a car search, or while working out the logistics of financing a vehicle:
Buyout Price: The price of buying a vehicle at the lease term’s end. If you think that you may purchase your car at the end of the lease, compare the costs of buying outright to those of buying after a lease.
Candy Store: Refers to a dealership with a whole lot of vehicle inventory.
Certificate of Title: An item provided by a title company or law office to indicate a vehicle’s legal ownership.
Dealer Holdback: A small percentage of a vehicle’s cost that the vehicle maker pays back to a dealership after the car has left the lot because someone bought it. This is what lets dealerships sell cars at the invoice price or below and still get a profit.
Dealer Incentives: Offers from car manufacturers to the dealers that incentivize them to sell more vehicles. Sometimes, they are money back but could be other things, too.
Dealer Invoice: The amount a vehicle maker charges its dealers for a vehicle.
Default: Neglecting to make payments or otherwise abide by the terms of a financing contract.
Destination Charge: The amount charged for getting new cars from the factory to the dealership. These are real costs that the dealership incurs and typically are not negotiable.
Documentation Fee: A charge that exists to cover the cost of processing the paperwork involved in a vehicle. These are typically in the $100-$150 range.
Down Stroke: a customer’s down payment
Excess-Mileage Charges: Penalties paid at the end of a lease if the lessee drives the vehicle a greater distance than the limit agreed to in the contract.
Extended Warranty: This coves certain various service and repair costs beyond the manufacturers factory warranty’s life.
GM: This person oversees the day-to-day operations of the dealership. The more formal name is “General Manager.”
MSRP: Manufacturers Suggested Retail Price.
Powertrain: The combination of your vehicle’s transmission and engine.
Prepayment Penalties: Charges you may incur for paying off a loan early. Yes, these exist. People with good credit haven’t a reason to accept prepayment penalties, so be aware of these if you want to get done paying off your loan before all of it is really due!
Pre-Qualify: To have a lender confirm you are eligible for a loan without you committing to its acceptance.
Rent Charge: A piece of your lease payment that goes to financing instead of principal reduction.
Tower: The floor manager’s central location. It’s literally an office on the showroom floor. It is glassed in to make is so that the manager can see everything going on. Sales staff go here to get approval on deals.
Trade-In Value: The price a dealership will pay for your present car when selling you a new one.
Thank you to this dealership with locations in the following locations for their help on this article: Downington, PA; Drexel Hill, PA; Jenkintown, PA; Langhorne, PA and Springfield, PA.