The ol I’m buying a car terminology . It’s just good for business…. your business.

Knowing some of the basic languageof the automobile industry, will help you negotiate on a more equal footing when the time comes for you to gain some footing.

So, at this point let me toss out a bit of automobile buying terminology you will probably run up against.

Certainly not a complete list, but a few terms just to get you limbered up so you don’t pull a hamstring.

Sticker Price or List Price:

First of all the government requires that all new cars must carry a sticker or list on their window.

Monroney Sticker – MoN-roney Sticker” NOT “Maroney”

At the top of this sticker is the base price of the car. This is the price of just the basic car buying and does not include an extras. The bottom of the sticker price includes all of the options that the particular car had put on it at the factory as well as the destination charge.

NOTE TO SELF – this is only the asking price for the vehicle. This price will include probably a markup of at least 10% above the dealer invoice.

Dealer Invoice:

This is the amount the dealer actually paid the factory for the car. This is a much more critical number to know than jus looking at the sticker or the list price.

Destination Charge:

Shipping and handling if you will.

This is what the dealer paid to get the car from the factory to the dealership. This is a legitimate cost incurred by the dealer.

Dealer Holdback:

This is topic in and of itself (and a quite elusive one). In fact, if you’d like a little light reading, here ya go…. dealer holdback.

The very short explanation for you here though, is quite simply put, dealer holdback is guaranteed profit for the dealer from the manufacturer.

Suffice it to say this nugget of profit that the manufacturer holds back from the dealer (generally anywhere from 1% to 3%) until the car is sold is pretty sacred stuff for the dealer. And if you actually get into the dealer holdback during the negotiations and actually garner some of it….. well…. kudos’ to you my friend.

It’s not likely the dealer will sacrifice any of this sacred cow, but on the other hand if the dealer claims how you have whittled him down to the bone on the deal, just smile and say…. “Really? Hmmmmm…. I guess you aren’t counting your holdback then?”

Factory To Consumer Rebate:

Unlike dealer holdback, you will definitely be aware of this one. When this money is released by the factory, it is usually very heavily advertised and marketed. This is usually mixed in with the guy screaming at you on the radio (typical car ad crap) about how low you monthly payments will be with this deal that will never happen again!!! …. or push pull or drag your trade in and “we’ll give you $5,000 for your old beater”…. sound familiar?

Well, if you keep listening to the ad, right at the end you’ll hear something about price and or trade contingent on dealer keeping all rebates. In other words, the dealer gets your money….. You really don’t think a dealer is going to give $5,000 of their money for that old beater you just pushed in do you???? C’mon now … you’ve come so far.

Trim Lines:

Most all cars come with at least two different trim lines. Each will have different equipment, options, and upgrades. Of course, the higher the trim line the more options attached and the higher the cost.

Standard Equipment:

What the car comes equipped with. If you don’t find a car equipped exactly the way you want it, ask the dealer to look for it at another dealership or perhaps order it for you. Also keep in mind you may also be able to save some money by looking at the next level of trim line rather than adding options separately.

Option Packages:

Manufacturers will usually group certain options together in a package to simplify the manufacturing process. The package will generally cost less than if the same options were purchased separately, however, it’s not a good deal if the package contains equipment that you really don’t want.