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Buying A
Car-Terminology
Learn the car
car buying lingo.
The ol I'm buying a car
terminology . It's just good for business.... your business.
Knowing some of the basic language
of 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 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.
-
Factory
To Dealer Rebate:
Just as stated, this is a discount the dealer may get from the
factory, and may or may not pass it along to you. Knowing about
such rebates gives you more room the negotiate the price of your
car.
-
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.
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