Auto Dealership
Credit Score
"FICO Score". This number provides potential lenders with the means to evaluate credit risk quickly & in a relatively objective manner
Extended Warranty
"Service contract" is is an agreement to cover certain specific service and repairs beyond the life of the factory warranty
PDI
1) Physical Damage Inspection - Insurance policy the F&I department might sell to customers. 2) Pre-Delivery Inspection - when the service department prepares a vehicle for delivery to the customer.
Special financing
1. High-interest loans for customers with poor credit. 2. Low-interest loans underwritten by the manufacturer
Spot Delivery
1. When all phases of the purchase and delivery are completed the same day. This may be with or without any kind of credit check or approval. 2. Any sales individual, be it salesman, sales manager, or Sales Business Manager, in reflecting his ability to do his required job
Destination Charge
Amount charged for transporting new cars from the factory to the dealership. Is on the dealer invoice and is not negotiable, but you should never pay any added fee tacked on by a dealer, unless you've requested and agreed to such a charge for a vehicle that must be transported a long distance from another dealer
Gross
Amount of profit
capitalized cost reduction
Anything—down payment, a trade-in—that reduces the amount financed through a lease.
Ad car
Basic car with few options (used to draw customers into the dealership with a low price and/or low payment)
Warranty
Basic guarantee that comes with a new vehicle.
Repo
Car that's repossessed for non-payment of a loan
Loaded
Car with every option. Could also mean a wealthy customer
Credit Report
Contains financial history information about a person. It focuses on payment obligations, current balances, such as amount of available credit, & public records like bankruptcy
Gap Insurance
Covers the difference between a vehicle's depreciated value in a loan or a lease and the amount owed on it in case it is stolen or totaled, a difference the owner or lessee would otherwise have to pay the lessor
Bureau
Credit report in a customer
Closed
Deal is done and the customer agreed to purchase the vehicle
Service Drive
Dealerships service department. Specifically used to identify the front-end where the advisors greet customers and inspect their vehicles. The shop is where the technician actually work in the vehicles
Twenty Group
Group of dealerships of similar size and market that is informed by the manufacturer. Dealers within a twenty group share financial and performance information for comparison purposes. Twenty groups also hold regular meetings to discuss common concerns
Tag (Hat, Block)
Identifier put on a vehicle when it comes in for service
Early Termination Fee
If for some reason the consumer is compelled to break the lease, the consumer will almost certainly be obligated to pay this fee
Reserve
Income a dealership realized on a contract in excess of the finance source's discount rate
NADA
National Automobile Dealers Association
Green Pea
New salesman
Tire Kicker
Normally someone who doesn't want to buy a car and just wants to look. They walk in, touch the merchandise, and don't talk to anyone
Recall
Notice by a manufacturer to the dealers and owners of a defective/unsafe vehicle or vehicle component
F&I Office
Office in a dealership in which vehicle purchase contracts are prepared and signed. Addition services like insurance or extended warranties may be offered to the purchaser
RDR(Retail Delivery Report)
Official registration of a new vehicle with its manufacturer
Junker
Old car ready for the scrap heap
Bird Dog
One who refers prospective customers to a particular dealership or salesman for a given fee or compensation
Warranty RO
Order for service repairs covered by a warranty plan; customer is not responsible for payment of the warranty maintenance; manufacturer reimbursed the dealer
OEM
Original Equipment Manufacturer
Buried
Owes too much on their trade (negative equity)
Rebate
Partial refund on a new car purchase offered by the manufacturer or dealership in order to increase sales. Can either be deducted from the purchase price or refunded by mail after the sale has been cimpleted
Accessories
Parts that add comfort, convenience, appearance, or safety to a vehicle
Fixed Operations (Back End)
Parts, service, and body shop departments
Lot Lizzard
Person who walks around the lot, never steps into the dealership, and never buys anything
Service Advisor/writer
Person who writes the initial RO for the customer on the service drive
Numbers
Price of the vehicle
Up
Prospect or fresh customer on the lot
Be-Back
Prospective buyer who has been in the dealership once or several times without making a purchase and promises that they'll be back
Buy Rate
Rate at which a car dealer acquired financing. The dealer can profit by offering the financing to a consumer at a higher cost and keeping the difference
Blue Book
Refers to the Kelley Blue Book value, an industry guide to dealers use to estimate wholesale & retail vehicle trade-ins or used cars. Can actually refer to a price looked up in one of the many guides to pricing
Back End
Refers to the amount of profit made from financing the vehicle at the dealership (reserve, credit insurance, gap insurance or extended service contracts)
MSRP
Represents the manufacturer's recommended selling price for a vehicle and its options
Unwind
Reversal of a car deal
Cherry Picking
Sales person that only takes customers that look or act like potentially easy buyers
End-of-Month
Series of activities performed to compile and process data needed to generate monthly reports; one result of these activities is the dealership's financial statement that is sent to the manufacturer
Internet Repair Order
Service performed on internal vehicles; charged to the department within the dealership requiring the work; often used to get vehicles ready to sell
Mouse House
Slang term used for a finance company
Third Baseman
Someone who accompanies a prospective buyer because the buyer feels they are better versed in haggling over the price of the car, and knows more mechanically, thereby decreasing the chances of getting stuck with a "lemon" or paying too much for a vehicle
Dealer Incentives
Special offers from car manufacturers to their dealers—which are usually passed on to the customer—to encourage sales in a slow market or when excess inventory builds up.
Holdback
Specified amount of money above the dealer's cost that domestic auto manufacturers keep for each new vehicle sold; held by the manufacturer for a specified period of time and then reimbursed to the dealer; treated as a savings account and "borrowed" from the manufacturer in times of cash-flow problems
Customer Satisfaction Index (CSI)
Term used in dealerships to cover anything relating to customer satisfaction; monitored by the manufacturer
Dealer Invoice
The amount a manufacturer charges its dealers for a car.
Absorption Rate
The amount of the dealership's total expenses covered by the profits from the fixed operations departments if the dealership(parts, service, and body shop).
Upside Down
The car's true value is less than the amount owed on the vehicle
APR
The cost of credit expressed as a yearly rate
BK
The customer has a bankruptcy in their credit history
Term
The length of a loan, usually stated in months
Front End
The new and used vehicle sales, F&I, leasing, and rental departments of a dealership
T.O. (Turnover)
The procedure used in selling where the salesman turns a prospective buyer over to another salesman or sales manager to close the sale
Pack
There are two interpretations. 1) used in figuring a salesman's commission, depending on the individual dealer they will deduct anywhere from $75 to $250 from the gross profit of the deal and pay the salesman his commission figured on this difference. 2) when the salesman or sales business manager would quote a monthly payment to a customer and increase the actual amount by 5 or 10 dollars to leave room for Credit Life; Accident and Health Insurance
Switch
To change a customer from buying one car to another for several reasons: availability, possible profit, etc.
VIN
Unique serial number used to identify each automobile
D. O. C. Daily Operating Control
Used mostly by the General Manager, this is a report detailing financial metrics of the dealership. Provides an at-a-glance summary of a dealer's gross profit and expenses for every department within the dealership
As-is
Used or pre-owned car sold without any type of warranty
Money Factor
Used to determine the lease rate. For all intents and purpose it is the lease equivalent of the interest rate in a conventional loan
Cream Puff
Used vehicle in excellent condition
Certified Pre-Owned
Used vehicle offered for sale by a franchised dealer for that vehicle make & who follows the manufacturer's requirements for "certifying" the vehicle & which, upon sale, is accompanied by a manufacturer-backed warranty
deskman or desk
Usually the new car or used car sales manager who both figures and determines what kind of deal the dealership will make to a customer
Limited Warranty
Vehicle warranty that is in effect for a specified number of years and/or miles driven
Lemon
Vehicle with numerous past and present mechanical problems that can never seem to be repaired properly
Program Car
Vehicle with typically less than 10,000 miles. Either driven by employees, OEM executives, rental companies or service loaners. Allows dealer to prorate price because of miles, sometimes can still be sold as a "new" car with full warranty and benefits. Also known as a Demo Vehicle
MPG
Vehicles fuel economy is determined by a number of factors including the size of the engine, the type of carburetion used, the weight of the vehicle, the type of transmission used, the final drive ration, the size and type of tires used, and tire inflation
Mini
When a car is sold at a very low profit and the sales person's commission is a minimum flat fee
Bait and Switch
When a customer is told something and then they are told something contradictory later in the sales process
DMV Fees
When buying a new car, you must have it registered & pay for the license plates before you can drive it away. May also be referred to as tax, title, and license fees or TT&L
Home Run
When maximum profit has been made on a deal, or when the F&I manager has sold the customer all the insurance he has available
Down Payment
When someone buys a car, and finances it through the dealership, they usually required to make a down payment of cash. This is credited against the balance of the loan.
Appraisal
When the used car manager values the trade-in
OAC
on approved credit
Closer
usually a more experienced salesman whose job it is to close the deal with the customer when the customer hesitates when dealing with the salesman.
Dealer Trade
when car dealers trade a new vehicle between them for a customer.
WAC
with approved credit
Teaser
A basic car with few options (used to draw customers into the dealership)
Credit
Ability to borrow money.
Make Ready Repair Order
After a vehicle is purchased it is detailed, fueled, the stickers and plastic is removed... before the customer takes delivery
Spread
Difference between a dealers Buy Rate and Sell Rate for financing
Repair Order (RO)
Document authorizing work on a vehicle in the service department; serves as a record of repairs performed, parts used and labor hours flagged
F&I Manager
Employee of a dealership whose job is to sell financing and insurance to customers who purchase vehicles
Residual Value
Estimated value of a car when it is returned from a lease
FICO
Fair Isaac Corporation. This is a company that calculates and distributes consumer credit scores
Acquisition Fee
Fee charged by the dealer for initiating a lease, covers the cost of processing the lease (credit reports and insurance verification) but in most cases is pure profit
Deal Jacket
Folder that contains all pertinent papers relating to the purchase and sale of a vehicle. Ex. Driver's license
Equity
For a vehicle financed through a loan, the difference at any time between what a vehicle is worth at that time, and the amount that is then owed on the loan
Window Sticker
Form the manufacturer attaches to the window of each new vehicle that shows the analysis of the vehicles suggested retail price
Closed-End Lease
Lease that gives the lessee the option of either buying the car at the end of the term at a set price or walking away without liability for any unexpected reductions in the vehicle's value
Open-End Lease
Lease typically only offered to fleets and companies in which the lessee is responsible for the difference between the residual and the fair market value of the vehicle at the close of the lease
Title (Pink Slip)
Legal document that contains ownership info of a specific vehicle
Balloon Payment/Loan
Loan that pays off only a portion of a vehicle during its term and demands a large sum to be paid at the end of the loan
Negative Equity
Means that your trade-in vehicle has a fair market value that is less than what you owe on it. This could be because you have not owned it very long and you still owe a very high payoff on it
Floor Planning
Method dealers use to finance new and sometimes used vehicle inventories through a bank or finance institution
Trade-in
a vehicle that is currently owned by the purchaser of a new or used vehicle from a dealer and that is exchanged for the newly purchased vehicle in order to reduce its net price
TT&L
abbreviation for tax, title, and license
Spiff
bonus a salesperson receives if a sale is made
House Deal
car deal that is for a dealership employee or family which makes very little profit.
We-Owe
form used to document anything that a dealer promises a customer that will be delivered after the sale.
recon or recondition
getting a car (normally a used one) ready for sale.