New Car Buying Glossary

Aftermarket AccessoriesBird DogsBuriedCarryover AllowanceChainedChurn & EarnCrème PuffCustomer IncentiveDealer HoldbackDealer Invoice PriceDemonstratorDestination PriceDown DipDown StrokeHard DollarsManufacturer’s CostMarket PricesMSRP (Manufacturers Suggested Retail Price)Option PackagesSoft DollarsSpecial Circumstances Dealer Incentives


When walking onto a car lot in some ways it is a bit like entering a foreign country, if you would like to get what you want you need to speak the language. Here are some car buying tips in the form of car salesmen vernacular.

Aftermarket Accessories
Some of the basics are undercoating, paint and fabric protector. These products are relatively cheap for the car dealership and offer them potential for large profits. Know the price of items like these before you make your shopping trip to the lot so you can push the price as low as possible.

Bird Dogs
This is not an Irish Setter; simply people who usually get a flat payment for referring a potential client to a car dealer.

Buried
Can also be referred to as Upside Down or Negative Equity. This is just simple math; it means you owe more money on your car you want to trade in than your car is worth.

Carryover Allowance
This is the amount a dealership discounts the cars on the lot when the new models arrive. This is one of the times you can really profit in a new car purchase. Just make sure you get the full allowance and you understand the value of that new last year’s model.

Chained
When an auto dealer offers you a price you just can’t turn down. This shockingly low price is more than likely a tactic to keep you on the lot and then the auto dealership will attempt to recoup profits by getting you to finance through the them, add accessories with a huge mark up or offering next to nothing for your trade in.

Churn & Earn
When a car dealership buys a number of popular model automobiles from the factory they commonly are required to purchase a few less popular cars at the same time. If you are looking for a model that fewer people are interested in then you are in luck. The car dealer will jump at the opportunity to get these vehicles off the lot so you should get a great deal.

Crème Puff
A term applied to your trade-in if it is in immaculate condition, should be a high profit turn over for the dealer.

Customer Incentive
Similarly referred to as a Rebate. Those less popular vehicles that are hard to move often get these factory-based bonuses. You might find them being offered when there is a general automobile sales slump or when a there is an over abundance of a certain make or model. What ever the reasons if you are shopping for a deal keep an eye out for these rebates.

Dealer Holdback
Interchangeable terms are Holdback and Giveback. Even if the car dealer who sells you your car made no profit on that sale based on what they paid to the factory, don’t feel too sorry for them because the factory will send them between 2 and 5 percent of that price after the sale.

Dealer Invoice Price
Other words used for this term are Invoice and Tissue. Simply stated the price paid by a car dealer to the factory for an automobile.

Demonstrator
Synonyms are Demo, Loaner and Loaner Vehicle. These vehicles are used for test drives, as temporary replacement vehicles for customers getting their car repaired and often the personnel of car dealerships drive them for personal use. Probably not driven with all due car.

Destination Charge
Also called the Delivery Charge. It’s the amount the dealer pays to have their cars shipped from the manufacturer to their dealership. The Destination Charge is the same for cars shipped 20 miles or 1,000 miles.

Down Dip
Referred to also as Dipping. When an auto dealership loans you the down payment until the financing comes through. If you can’t cover this perhaps it is not time to buy a new car.

Down Stroke
Possibly also referred to as Down Dump, Lump and Put Down. This is the amount of your down payment via cash or trade-in.

Hard Dollars
This is the money that the car dealership is investing in your trade-in.

Manufacturer’s Cost
Another term used to describe this is Auto Maker Costs. There are so many aspects of overhead in production it is almost impossible to assign a specific production cost to a specific vehicle.

Market Prices
The element of supply and demand as well as the geographic area in which a vehicle is sold sets Market Price. This is a fluctuating variable that is worth keeping your eye on.

MSRP (Manufacturers Suggested Retail Price)
A number of names are used to describe this including List Price, Maroni, Munroney, Retail Price, Sticker and Sticker Price. This is a price that has nothing to do with the price you should negotiate from and usually represents about a 12 per cent mark up over the Dealer List Price. There is a smaller percentage mark up for cheaper cars and a larger one for more expensive cars.

Option Packages
Just as the name indicates a group of options offered together that could simplify the assembly procedure and save you money.

Soft Dollars
Similar to the tactic of Chaining, in this case a car dealer will pay you way too much for your trade-in. Don’t worry they will get it back.

Special Circumstances Dealer Incentives
Auto manufacturers give their new dealerships bonuses to help them establish a solid base of new customers. Keep an eye out for any new dealers in your quest for a good auto deal.

Your greatest ally at a car dealership is knowledge and the only way to gain that knowledge is to do research and ask questions. Shop for your car with an arsenal of information and you will always come out on top.


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