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Glossary Actual Cash Value or ACV: The true dollar amount your car is worth to the dealer.
Advance of Book Value: The percentage of book value that the lender will lend according to your credit. The lender decides advance.
Amortize: To liquidate (pay off) a debt by installment payments.
Base Price: The cost of the car without options.
Be-Back: A customer who leaves the car lot promising to return later, saying, “I’ll be back,” or some variation of that statement.
Bird Dog: Referral fee.
Blue Book: Refers to Kelly Blue Book, a guide used to estimate vehicle values.
Bomb: An old car with no value.
Bonded Title: A title for a vehicle when the owner has no proof of ownership during the titling process.
Book Value: The estimated value of a car as found in the N.A.D.A, the Kelly Blue Book, or the Black Book, used by lenders to determine the amount they will lend.
Bumping: A method used to raise the price or payment. For example, if a customer says they only want to pay $250 a month, the salesperson is trained to say, “Up to ?” And the customer will probably bump him or herself up to $300 without the salesperson doing anything.
Buried: When you owe a good deal more for the car than the car is worth.
Buyer’s Remorse: A psychological state in which the buyer feels that he or she has just made a big mistake.
Certified Pre-Owned Vehicle: A used car.
Clocking, or Clocked: The illegal practice of tampering with a vehicle’s odometer.
Closer: An experienced salesman who is brought in to “close” the sale by making the customer agree to a deal.
Collateral: Property acceptable as security for a loan.
Column of Finance: Conditions of a loan according to individual credit ratings.
Commercial Vehicle: A vehicle registered for business purposes.
Conditions: The particulars of a loan, such as interest rate, down payment, advance of book value the lender will lend, and the monthly payment.
Cream Puff: A used car in very good condition.
Crop Duster: A car with a smoking exhaust problem.
Customized: A stock vehicle that has been modified with after-market products.
Dead-Beat: A customer with a history of not paying debts.
Demo: The vehicle used for a test drive, or by an employee of the dealership.
Destination Charge: The fee charged for transporting the vehicle to the dealer from the manufacturer or port of entry. This charge is passed on to the buyer of the vehicle.
Dismantled Title: A title issued when a vehicle has sustained major damage to one or more major components and the cost of repairing the vehicle for safe operation exceeds it’s fair market value. At this point, the vehicle can only be used for parts or scrap metal, it cannot be re-titled and returned to the road.
Equity: When the value of the car is less than what is owed on the car loan.
Exceptions: Every lending institution has a lending comfort zone, exceptions are conditions that are granted by the lender outside of this zone.
Extended Warranty or Service Contract: A contract that covers the cost of certain car repairs after the manufacturer’s warranty expires.
F&I: This stands for the Finance and Insurance office where the documents are signed. The F&I salesperson usually only sells back-end products, such as extended warranties, fabric protection and gap insurance.
First Pencil: This is the opening offer from the sales manager. It is highly negotiable and written in pencil, not ink.
Four-square: As the negotiation begins, the salesperson uses a worksheet divided into four squares which represent the four elements of a car deal; selling price, trade-in value, monthly payment and down payment. The four square model is an excellent tool for the salesperson because it can be manipulated to show almost anything.
Gap Insurance: An insurance policy you purchase at the dealership, designed to protect people who are buried in their car. In other words, a Gap policy covers the amount you owe above what the vehicle is worth.
Gasser: A talkative or boastful customer who does not actually have the funds to buy the vehicle.
GM: The general manager. The GM is the head honcho at the dealership and runs the business from day to day.
Green Pea: A car salesperson who is new to the business of selling cars.
Grinder: A customer who negotiates for hours over a small amount of money.
Home Run: When a salesperson has taken advantage of the customer in every aspect of the deal and makes a lot of money in the process.
Invoice Price: The manufacturer’s initial cost to the dealer. This may not be the dealer’s final cost because the dealer receives rebates and incentives from the manufacturer.
Kick-Back: An amount of money that is refunded to the car dealer after the sale is made. This may come from the car maker, the finance company, or an insurance company, de-pending on how the car was sold. A kick-back is often kept secret.
Lay Down: A customer who takes whatever deal the salesperson offers.
Lemon: A lousy car.
Loaded: A car with all the options, or a very wealthy customer.
Mini: The commission on a deal where the car was sold at close to invoice, and therefore without a large profit.
Mooch: A customer who wants to buy a car at invoice.
Nut: The price at which the dealer breaks even or makes minimum profit.
Negative Equity: When you owe more for your car than it is worth.
Off Lease: A vehicle that was originally leased and is now being sold as a used car.
Open Negative: An outstanding debt on your credit report.
Pack (as in Dealer Pack or Management Pack): An extra profit added to the cost of the vehicle.
Payoff: The amount owed on the loan to release the title.
Player: A customer with good credit history.
Pounder: A deal with huge profit in it.
Powerbooked: Fabricating options on a vehicle to increase book value.
Pre-Approval: Arranging financing before you pick out a vehicle.
Recall: Automobile manufacturers issue recall notices to inform owners of defects. Recalls inform owners of maintenance or repairs that should be performed on the vehicle. These repairs are usually done at no cost to the owner.
Refinance: To renew or restate the financing of a loan.
Repo or repossession: To have the car taken and returned to the lienholder for nonpayment on a loan or breaking contract stipulations.
Roach: A customer with bad credit.
Rollback or Unwind: The process of undoing a car deal.
Rubbernecker: Someone looking with no intention to buy.
Secondary Finance or Sub-Prime Financing: Financing for less than perfect credit.
Shark: A ruthless and greedy salesperson.
Spiff: A tip, kickback or payment of any kind. A bonus given to salespeople.
Sticker Shock: A customer’s surprise first reaction to the posted or quoted price of the vehicle.
Strong: Holding firm on your price and being a tough negotiator. (See also, ‘weak’.)
Tower: The office where the sales managers work. This is usually a raised platform allowing the managers to see over the roofs of the cars so they can watch the customers and their salespeople.
Title: The accepted legal document containing specific proof of ownership, make, model, and liens associated with the vehicle. If you borrow money to buy a car, the title will be held by the lender until the vehicle is paid off.
Turn over or turning: This is the practice of passing a customer from one salesperson to another. The theory behind turning is that the customer may just have bad chemistry with the first salesperson and by switching them, you prevent the customer from leaving the car lot.
Upside-Down: When the car’s true value is less than the amount owed on the vehicle.
Vehicle Identification Number (VIN): A 17 character number that is unique to each vehicle.
Voucher: Car salespeople receive a voucher to let them know how much commission they got for selling a particular car. Salespeople don’t know until the deal is finalized, exactly how much commission they will receive.
Weak: A term used to describe a weak negotiator, or coming down too quickly on a price.
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