Dealer-speak, translated

129 terms you will hear or read while buying a car, in plain English.

A

Acquisition feealso: bank fee, lease initiation fee, assignment feeLeasing: A fee the leasing company charges to set up a lease. It can be paid at signing or rolled into the payments. The leasing company sets the base amount, but dealers are sometimes allowed to mark it up, so ask what the base fee is. Read the guide →
Actual cash valuealso: ACV, wholesale valueTrade-ins: What a car is worth today in its current condition. For a trade-in, it is what the dealer believes it could buy the same car for at wholesale. Insurers use the same phrase for the market value they pay when a car is totaled. Read the guide →
Addendum stickeralso: dealer addendum, supplemental sticker, second stickerPricing: A second sticker the dealer places next to the official window sticker, listing dealer-added items and markups with their prices. Everything on it was set by the dealer, not the manufacturer. Ask which items can be removed or discounted before you agree on a price. Read the guide →
Advertised pricealso: listed price, internet price, e-pricePricing: The price shown in a dealer's listing or ad. It may leave out fees and dealer-installed add-ons, or include rebates that not every buyer qualifies for. Read the fine print and ask the dealer to confirm in writing what the advertised price does and does not include. Read the guide →
All-wheel drivealso: AWDThe vehicle: A system that sends power to all four wheels automatically, with no input from the driver. It helps you get moving on wet or snowy roads, but it does not help you stop or turn any better. It adds cost and usually lowers fuel economy a little, so buy it if your conditions call for it. Read the guide →
Allocationalso: dealer allocation, build slotAt the dealership: The number and mix of new cars a manufacturer assigns a dealer to sell. A dealer can only order or reserve cars within its allocation. For a hard-to-find model, ask whether the dealer has an actual allocation for it or is only adding you to a waiting list. Read the guide →
Appraisalalso: trade appraisal, trade evaluationTrade-ins: The dealer's inspection and pricing of your trade-in, based on condition, mileage, history, and what similar cars are selling for at auction. Different dealers can reach quite different numbers. Clean the car, bring your service records, and get more than one appraisal. Read the guide →
APRalso: annual percentage rateFinancing: The yearly cost of borrowing, shown as a percentage, including interest and certain lender charges. It is the best single number for comparing loan offers of the same length. Even a small difference in APR adds up over a multi-year loan, so compare offers from more than one lender. Read the guide →
As-isalso: as is, no dealer warranty, sold as-isUsed cars: A sale in which the dealer takes no responsibility for problems or repairs after you buy. Some states limit or do not allow as-is sales by dealers, so check your state attorney general's site. With an as-is car, an independent inspection before you buy is your main protection. Read the guide →

B

Battery electric vehiclealso: BEV, EV, all-electric, full electricEVs & hybrids: A car that runs only on electricity stored in a battery, with no gasoline engine. You charge it by plugging in at home or at public chargers. Before you buy, work out where you will charge most of the time. Read the guide →
BDCalso: business development center, internet departmentAt the dealership: The dealership team that answers online inquiries, calls, and texts. Their main job is usually to set an appointment, not to quote a price. If you want numbers, ask for an itemized out-the-door quote in writing, and ask for an internet sales manager if the BDC cannot provide one. Read the guide →
Bumper-to-bumper warrantyalso: basic warranty, comprehensive warranty, limited warrantyInsurance & warranty: The broadest part of a factory warranty, covering most parts of the car against defects. Despite the name, it leaves out wear items such as tires, brake pads, and wiper blades, as well as damage and neglect. It usually ends sooner than the powertrain warranty. Read the guide →
Buy here, pay herealso: BHPH, in-house financing, tote the noteFinancing: A dealer that lends its own money to buyers and collects the payments itself, often without a traditional credit check. It can be a way to get a car when other lenders say no, but rates and prices tend to be high, and some cars carry devices that allow quick repossession. Ask whether your payments are reported to the credit bureaus, and compare other options first. Read the guide →
Buy ratealso: lender rate, wholesale rateFinancing: The interest rate a lender quotes the dealer for your loan. The rate the dealer then offers you can be higher, and the dealer is paid for the difference. You will not normally be shown the buy rate, which is why bringing your own pre-approval is the best way to keep the dealer's offer honest. Read the guide →
Buyer's orderalso: purchase agreement, bill of sale, purchase order, vehicle purchase contractPaperwork: The document that lists the terms of the sale: the car and its VIN, the price, every fee, taxes, your trade-in, and the amount due. Once signed, it is generally a binding contract. Read every line, compare it with your written quote, and do not sign with blanks or numbers you do not understand. Read the guide →
Buyers Guidealso: FTC Buyers Guide, used car window formUsed cars: The form dealers have to display on every used car they offer for sale, under the FTC's Used Car Rule. It says whether the car is sold as-is or with a warranty, and what share of repair costs the dealer will pay under that warranty. The FTC says it overrides anything contrary in your sales contract, so have any spoken promises written on it and keep your copy. Read the guide →

C

Cap cost reductionalso: capitalized cost reduction, lease down paymentLeasing: Anything that lowers the capitalized cost at signing: cash down, a rebate, or trade-in equity. It lowers your payment, but if the car is totaled or stolen early, you generally do not get that cash back. Many people keep cash down on a lease low for that reason. Read the guide →
Capitalized costalso: cap cost, gross capitalized cost, lease priceLeasing: The price of the car in a lease, plus any fees or products rolled in. It works like the selling price in a purchase and is negotiable in the same way. A lower capitalized cost means a lower payment, so negotiate it before you discuss the monthly figure. Read the guide →
Captive lenderalso: captive finance company, manufacturer finance armFinancing: A finance company owned by or tied to a car manufacturer, which lends on and leases that brand's cars. Special low rates and most lease deals come through the captive. Some rebates require financing with it, so ask whether you can refinance or pay the loan off early without losing the rebate. Read the guide →
CCSalso: Combined Charging System, CCS1, CCS ComboEVs & hybrids: A charging connector used for DC fast charging on many non-Tesla EVs sold in North America. It combines the standard J1772 plug with two extra pins for fast charging. A car with a CCS port may be able to use NACS fast chargers with an approved adapter; check what the manufacturer supports. Read the guide →
Certified pre-ownedalso: CPO, manufacturer certified, certified usedUsed cars: A used car that passed a manufacturer's inspection program and is sold by that brand's franchise dealer with a manufacturer-backed warranty. It costs more than a similar non-certified car. Programs differ by brand, and a dealer's own certification is not the same thing, so ask who backs the warranty and read what it covers. Read the guide →
Collision coveragealso: collision insurance, collisionInsurance & warranty: Insurance that pays to repair or replace your car after a crash with another vehicle or an object, whoever was at fault, minus your deductible. Lenders and leasing companies generally require it. Get an insurance quote on the specific car before you buy, since the cost varies a lot by model. Read the guide →
Comprehensive coveragealso: comprehensive insurance, comp, other than collisionInsurance & warranty: Insurance that pays for damage to your car from things other than a collision, such as theft, hail, flood, fire, falling objects, or hitting an animal, minus your deductible. Lenders and leasing companies generally require it. Together with collision and liability, it is what people usually mean by full coverage. Read the guide →
Cooling-off periodalso: right to cancel, return policy, buyer's remorsePaperwork: A window of time to cancel a purchase after you sign. According to the FTC, federal law does not require dealers to give you three days to cancel a car deal and return the car. Some states require dealers to offer a right to cancel, and some dealers offer their own return policy, so check with your state attorney general and get any return policy in writing. Read the guide →
Cosigneralso: co-signer, co-borrower, co-buyerFinancing: A person who signs the loan with you and promises to repay it if you do not. A cosigner with good credit can help you get approved or get a lower rate. The loan appears on the cosigner's credit too, and missed payments hurt both of you, so it is a serious favor to ask. Read the guide →
Credit scorealso: FICO score, credit tier, auto scoreFinancing: A number based on your credit history that lenders use to decide whether to lend to you and at what rate. Auto lenders often use a version built for car loans, so the score they see may differ from the one in your banking app. Check your credit reports for errors before you apply. Read the guide →

D

Days on lotalso: days in inventory, time on market, aged inventoryAt the dealership: How long a specific car has been in a dealer's inventory. Dealers pay to keep each car in stock, so one that has been sitting a long time is often easier to get a discount on. It can also mean the car is overpriced or has an unpopular color or options, so look at why. Read the guide →
DC fast chargingalso: DCFC, Level 3, fast charging, rapid chargingEVs & hybrids: High-power public charging that sends direct current straight to the battery. It is the fastest way to charge and is what you use on road trips. Speed depends on the charger and on your car's maximum charge rate, and it slows down as the battery fills. It usually costs more per kilowatt-hour than charging at home. Read the guide →
Dealer add-onsalso: dealer-installed accessories, dealer-installed options, protection packageFees: Products the dealer adds to a car and charges for, such as paint sealant, fabric protection, nitrogen in the tires, wheel locks, or window tint. They are often pre-installed and priced well above what they cost the dealer. You can ask to have them removed, discounted, or to see a car that does not have them. Read the guide →
Dealer cashalso: dealer incentive, factory-to-dealer incentive, trunk moneyPricing: Money the manufacturer pays the dealer, not the buyer, for selling certain models. It is usually not advertised, and the dealer can keep it or use it to lower your price. You cannot demand it, but it explains why some cars have more room to negotiate than others. Read the guide →
Dealer prep feealso: pre-delivery inspection fee, PDI fee, prep feeFees: A charge for getting a car ready for sale: removing shipping covers, checking fluids, washing it. On new cars, manufacturers generally already pay dealers for this work, so a separate fee is worth questioning. Ask to have it removed or offset in the selling price. Read the guide →
Dealer reservealso: rate markup, dealer participation, finance reserveFinancing: The extra interest a dealer adds on top of the lender's buy rate, kept as payment for arranging the loan. Lenders usually limit how much can be added. The marked-up rate is negotiable, so ask the dealer to beat your pre-approved rate, not just match it. Read the guide →
Dealer tradealso: dealer swap, dealer locate, DXAt the dealership: When your dealer gets the exact car you want from another dealer's inventory, usually by swapping one of its own. It can save you from settling for the wrong color or options. Agree on the price first, and ask whether any transport cost or added miles are involved. Read the guide →
Debt-to-income ratioalso: DTIFinancing: Your monthly debt payments divided by your monthly income before taxes. Lenders use it, along with a payment-to-income limit, to judge whether you can handle a new payment. Limits vary by lender, so it helps to know your own ratio before you apply. Read the guide →
DeductibleInsurance & warranty: The amount you pay out of pocket before coverage pays the rest. It applies to insurance claims and to most service contracts, where it may be charged per visit or per repair. A higher deductible lowers what you pay for the coverage but raises your cost when something goes wrong. Read the guide →
Demo caralso: demonstrator, executive demo, manager's specialAt the dealership: A new car that has never been titled to an owner but has been driven by dealership staff or used for test drives. It is sold as new with miles on it, and the warranty may have started earlier than your purchase date. Ask for the mileage, the warranty start date, and a discount that reflects both. Read the guide →
Depreciationalso: loss of valuePricing: The drop in a car's value over time. It is usually the largest cost of owning a newer car, and it is steepest in the first few years. It varies a lot by model, so check how well a car has held its value before you buy. Read the guide →
Destination chargealso: destination fee, delivery charge, freightPricing: The manufacturer's charge for shipping a new car from the factory to the dealer. It appears on the window sticker, is the same for a given model no matter how far the dealer is from the factory, and is generally not negotiable. Check that it is not charged a second time under another name such as a delivery or freight fee. Read the guide →
Disposition feealso: turn-in fee, lease-end feeLeasing: A fee charged when you return a leased car, meant to cover the cost of preparing and selling it. It is listed in your lease contract. It is often waived if you lease or buy another car from the same brand, and usually does not apply if you buy your leased car. Read the guide →
Doc feealso: documentation fee, dealer processing fee, conveyance fee, administrative feeFees: A fee the dealer charges for preparing the sales paperwork. It is a dealer charge, not a government fee. Some states cap it and others do not, so the amount varies widely; check your state's rule with the attorney general or DMV. Dealers often will not remove it, but you can ask for a lower selling price to make up for it. Read the guide →
Down paymentalso: cash down, money downFinancing: Money you pay up front that reduces how much you borrow. A larger down payment lowers your payment and total interest, and makes it less likely you will owe more than the car is worth. Trade-in equity and rebates can count toward it. Read the guide →
Drivetrainalso: drive type, drivelineThe vehicle: The parts that send power to the wheels, and shorthand for which wheels are driven: front, rear, or all four. It affects traction, fuel economy, price, and maintenance costs. Choose based on the weather and roads you actually drive on. Read the guide →
Due at signingalso: drive-off, drive-off amount, inception feesLeasing: The total you pay to start a lease: usually the first payment, any cash down, the acquisition fee if paid up front, taxes, registration, and dealer fees. Lease ads often show a low payment that depends on a large amount due at signing. To compare leases fairly, add the amount due at signing to the total of all the payments. Read the guide →

E

Equityalso: positive equity, trade equityTrade-ins: The difference between what your car is worth and what you owe on it. If it is worth more than you owe, the extra works like a down payment on your next car. If it is worth less, you have negative equity. Read the guide →
EV tax creditalso: clean vehicle credit, federal EV credit, EV incentive, point-of-sale rebateEVs & hybrids: A tax credit or rebate from a government or utility for buying or leasing an electric or plug-in vehicle. These programs change often. The IRS states that the federal new clean vehicle credit is not available for vehicles acquired after September 30, 2025; state, local, and utility programs may still apply where you live. Confirm any incentive on the official program site before you count it in your budget. Read the guide →
Excess wear and tearalso: excess wear and use, lease-end damage chargesLeasing: Damage beyond normal use that the leasing company charges for at turn-in, such as large dents, torn seats, cracked glass, or worn-out tires. Your contract and the leasing company's guide define what counts. Get the free pre-return inspection if one is offered, so you can fix things yourself first if that is cheaper. Read the guide →

F

F&I officealso: finance and insurance, finance office, business office, the boxAt the dealership: The office where you sign the final paperwork and where the dealer offers financing and add-on products such as service contracts and GAP. The finance manager is a salesperson, and these products are a major source of dealer profit. Everything offered there is optional and negotiable, and you can say no to all of it. Read the guide →
Factory orderalso: custom order, sold order, build to orderAt the dealership: A new car ordered through a dealer and built to your chosen trim, color, and options. You wait longer but get exactly what you want without paying for extras you do not. Get the agreed price, deposit terms, and what happens if incentives change in writing before you order. Read the guide →
Factory warrantyalso: new vehicle limited warranty, manufacturer warrantyInsurance & warranty: The manufacturer's promise to fix defects in a new car for a set number of years or miles, whichever comes first, at no charge. It is included in the price and is honored at any of that brand's dealers. On a used car, check how much is left and whether it transfers to you. Read the guide →
Flood damagealso: flood title, water damage, flood brandUsed cars: Damage from a car sitting in water, which can ruin electronics and cause corrosion that shows up months later. Some flooded cars receive a flood title brand; others are cleaned up and sold without one. Look for musty smells, silt under the carpet, and rust in unusual places, and have a mechanic check. Read the guide →
Four-squarealso: four-square worksheet, worksheet, pencilAt the dealership: A worksheet split into four boxes: price, trade-in value, down payment, and monthly payment. Working all four at once makes it hard to see where the money is going, because a gain in one box can be taken back in another. Settle one number at a time, starting with the out-the-door price. Read the guide →
Four-wheel drivealso: 4WD, 4x4The vehicle: A heavier-duty system, common on trucks and off-road SUVs, that drives all four wheels and often adds a low-range gear for rough terrain. Many versions are engaged by the driver when needed. It is meant for off-road use, deep snow, and towing, more than for everyday pavement. Read the guide →
Frame damagealso: structural damage, unibody damageUsed cars: Damage to the structure that holds a car together and protects you in a crash. Even after repair, it can affect safety, alignment, and tire wear, and it lowers resale value a lot. If a history report or inspection mentions structural damage, have a body shop look at the repair before you go any further. Read the guide →
Front-wheel drivealso: FWDThe vehicle: The engine or motor powers the front wheels. It is the most common layout in everyday cars and small SUVs, and it tends to cost less and use less fuel than all-wheel drive. With good tires it handles most rain and light snow well. Read the guide →

G

GAP coveragealso: GAP insurance, guaranteed asset protection, GAP waiverFinancing: Coverage that pays the difference between what your insurer pays for a totaled or stolen car and what you still owe on the loan or lease. It is most useful with a small down payment, a long loan, or rolled-in negative equity. It is optional on most loans, and your own insurer or credit union may sell it for less than the dealer does. Read the guide →

H

Holdbackalso: dealer holdbackPricing: Money the manufacturer pays back to the dealer after a new car is sold, usually figured as a small percentage of MSRP or invoice. Not every brand uses it, and the amount varies. It is one reason a dealer can sell a car at or near invoice and still make money. Read the guide →

I

Implied warrantyalso: warranty of merchantability, implied warranties onlyUsed cars: An unwritten promise that comes from state law, the most common being that the car will do what a car is supposed to do: run. It generally applies to dealer sales unless the car is sold as-is, and its strength and length vary by state. The Buyers Guide on the car tells you whether implied warranties apply. Read the guide →
In transitalso: inbound, on order, in productionAt the dealership: A car that has been built or scheduled and assigned to a dealer but has not arrived on the lot yet. Dealers often list these cars and will take a deposit to hold one. Arrival dates are estimates, so ask for the VIN, the expected date, and the deposit terms in writing. Read the guide →
Incentivealso: manufacturer incentive, factory incentive, special offerPricing: Any offer from the manufacturer meant to help sell a car, such as a cash rebate, a low-rate loan, a lease special, or money paid to the dealer. Incentives change often and can depend on your location, the exact model, and how you pay. Check the manufacturer's own site for current offers in your ZIP code and note the expiration date. Read the guide →
Invoice pricealso: dealer invoice, factory invoicePricing: The amount the manufacturer bills the dealer for a new car. It is not the dealer's true cost, because holdback, dealer cash, and volume bonuses can lower it afterward. Treat it as background information, not as a floor the dealer cannot go under. Read the guide →

K

Kilowattalso: kW, charging power, charging speedEVs & hybrids: A unit of power. For charging, it tells you how fast energy flows into the battery: more kilowatts means faster charging. Your actual speed is limited by whichever is lower, what the charger can supply or what the car can accept. Read the guide →
Kilowatt-houralso: kWh, battery capacity, battery sizeEVs & hybrids: A unit of energy. It is how EV battery size is measured, in the way a gas tank is measured in gallons, and it is also the unit on your electric bill. A larger battery generally means more range but also more weight and cost. Read the guide →

L

Lease buyoutalso: lease-end buyout, purchase option, early buyout, buyout priceLeasing: Buying your leased car, either at the end of the lease or before. The lease-end price is set in your contract, usually the residual value plus any purchase fee. It can be a good deal if the car is worth more than that price; ask the leasing company for the exact buyout amount, and check whether tax and dealer fees apply in your state. Read the guide →
Lemon buybackalso: manufacturer buyback, lemon law buyback, repurchased vehicleUsed cars: A car the manufacturer bought back from its owner, often because of a defect that could not be fixed in a reasonable number of tries. Many states require the title to be branded and the buyer to be told, but rules vary. These cars are usually repaired and resold at a discount; ask for the repair records and what warranty comes with it. Read the guide →
Lemon lawalso: state lemon lawPaperwork: State laws that give buyers a remedy, such as a refund or replacement, when a vehicle has a serious defect the manufacturer cannot fix after a reasonable number of attempts. What is covered, including whether used or leased cars count, varies by state. Keep every repair order, and check your state attorney general's site for the rules. Read the guide →
Level 1 chargingalso: L1, 120-volt charging, trickle chargingEVs & hybrids: Charging from a regular 120-volt household outlet. It is the slowest method, adding only a few miles of range per hour, but it needs no special equipment. It can be enough for a plug-in hybrid or for short daily drives. Read the guide →
Level 2 chargingalso: L2, 240-volt charging, home chargerEVs & hybrids: Charging on a 240-volt circuit, the kind used by a clothes dryer. It is the usual setup for home charging and for public chargers at workplaces and stores, and it can typically refill a battery overnight. Home installation cost depends on your electrical panel and wiring, so get a quote from an electrician. Read the guide →
Liability coveragealso: liability insurance, bodily injury and property damage liabilityInsurance & warranty: Insurance that pays for injuries and damage you cause to other people in a crash. Nearly every state requires some minimum amount, and the minimums vary. It does not pay to repair your own car. Read the guide →
Lienalso: lienholder, security interest, lien releasePaperwork: A lender's legal claim on a car until the loan is paid. The lender, called the lienholder, is listed on the title, and the car cannot be sold with a clear title until the lien is released. When you buy a used car from a private seller, confirm that any lien will be paid off and released as part of the sale. Read the guide →
Loan termalso: term, loan lengthFinancing: How long you have to repay the loan, stated in months. A longer term lowers the monthly payment but raises the total interest you pay and keeps you owing more than the car is worth for longer. Pick the shortest term whose payment fits comfortably in your budget. Read the guide →
Loan-to-value ratioalso: LTV, advanceFinancing: The loan amount divided by the car's value, as the lender figures it. Lenders set a maximum, and financing add-ons, taxes, or an old loan balance can push you over it. A lower ratio usually means easier approval and a better rate, which a larger down payment helps with. Read the guide →
Loaner caralso: service loaner, courtesy vehicle, retired loanerAt the dealership: A car the dealer lends to service customers. When loaners are retired they are sold at a discount, sometimes as new and sometimes as used, depending on whether the car was titled and on state rules. Confirm the title status, the warranty start date, and which incentives still apply. Read the guide →

M

Market adjustmentalso: ADM, additional dealer markup, dealer markup, market value adjustmentPricing: An amount a dealer adds above MSRP on a car that is in high demand. It is pure dealer pricing, not a manufacturer charge or a government fee, and it is negotiable. If one dealer will not remove it, another dealer selling the same model may not charge it at all. Read the guide →
Market pricealso: market value, going ratePricing: What a specific car is actually selling for in your area right now, based on comparable listings and sales. It can be above or below MSRP depending on supply and demand. It is the most useful number to negotiate from, so check several comparable listings before you make an offer. Read the guide →
Mileage allowancealso: annual mileage, mileage limit, excess mileage chargeLeasing: The number of miles a lease allows, usually set per year. If you go over, you pay a per-mile charge stated in the contract when you return the car. Be realistic about how much you drive; buying extra miles up front usually costs less than paying the overage at the end. Read the guide →
Model yearalso: MYThe vehicle: The year a manufacturer assigns to a version of a car, which often differs from the calendar year it was built or sold. Next year's models commonly arrive months early. When the new model year arrives, the outgoing one is usually discounted, which can be a good deal if little has changed. Read the guide →
Money factoralso: lease factor, lease rate, rent charge rateLeasing: The finance charge on a lease, written as a small decimal. Multiply it by 2,400 to get a rough equivalent interest rate. Dealers can sometimes mark it up above the leasing company's base rate, so ask for the money factor in writing and compare it with the base rate for your credit tier. Read the guide →
Monroney labelalso: window sticker, Monroney sticker, factory stickerThe vehicle: The official manufacturer's window sticker on a new car. It lists standard equipment, factory options, the destination charge, MSRP, and fuel economy or EV range ratings. It is the reliable record of how the car was built, so read it and keep it separate in your mind from any dealer addendum beside it. Read the guide →
MPGealso: miles per gallon equivalentEVs & hybrids: An EPA rating that shows how efficiently an EV or plug-in hybrid uses energy, expressed on a scale comparable to miles per gallon. Higher is more efficient. Use it to compare electric models with one another; to estimate running cost, look at the energy use per 100 miles on the window sticker and your electric rate. Read the guide →
MSRPalso: manufacturer's suggested retail price, sticker price, list pricePricing: The price the manufacturer suggests a dealer charge for a new car, printed on the window sticker. It is a suggestion, not a rule, so a dealer can sell above or below it. Use it as a reference point, then compare it with what the same car is listed for at several dealers. Read the guide →
Multiple security depositsalso: MSD, MSDsLeasing: Refundable deposits you can pay at the start of a lease to lower the money factor. You get the money back at lease end if you meet the lease terms. Only some leasing companies offer the option, and it may not be available in every state. Read the guide →

N

NACS (J3400)also: North American Charging Standard, SAE J3400, Tesla connectorEVs & hybrids: A compact charging connector originally designed by Tesla and now published as the SAE J3400 standard. Many automakers have adopted it or announced plans to. Which fast-charging networks a given car can use, and whether it needs an adapter, depends on the model and year, so check with the manufacturer. Read the guide →
Negative equityalso: upside down, underwater, invertedFinancing: Owing more on a car loan than the car is worth. If you trade the car in, the shortfall does not disappear; it is usually added to your new loan, so you pay interest on it again. Know your payoff amount and your car's value before you shop, and consider paying the gap down first. Read the guide →
NMVTISalso: National Motor Vehicle Title Information SystemUsed cars: A national database of title, brand, and total-loss information reported by state motor vehicle agencies, insurers, and salvage yards. Approved providers sell low-cost reports drawn from it. It is strong on title brands but does not include repair or maintenance history, so it complements a full history report. Read the guide →

O

Odometer disclosurealso: odometer statement, mileage disclosureUsed cars: A signed statement of the car's mileage that the seller gives the buyer when ownership changes, usually on the title itself. It says whether the reading is the actual mileage. Older vehicles can be exempt, and the details depend on the car's age and your state. Compare the reading with service records and the history report. Read the guide →
Out-the-door pricealso: OTD price, drive-away price, total pricePricing: The total you would pay to leave with the car: selling price plus taxes, government fees, dealer fees, and any add-ons, minus rebates. It is the only number that lets you compare offers from different dealers fairly. Ask for it in writing, itemized line by line, before you visit. Read the guide →

P

Packagealso: option package, equipment groupThe vehicle: A group of features the manufacturer sells together on top of a trim, such as a cold-weather or technology package. Factory packages are listed on the window sticker with their prices. Two cars of the same trim can differ by thousands of dollars because of packages, so compare stickers line by line. Read the guide →
Payoff amountalso: payoff, loan payoff, 10-day payoffTrade-ins: The total needed to pay off your current loan in full on a given date, including interest up to that day. It is usually a bit higher than the balance on your statement. Get a payoff quote from your lender before you trade in or sell, and later confirm that the dealer actually paid it. Read the guide →
Plug-in hybridalso: PHEV, plug-in hybrid electric vehicleEVs & hybrids: A car with both a gasoline engine and a battery you can plug in. It drives a limited distance on electricity alone, then runs like a regular hybrid on gasoline. It saves the most fuel when you charge it regularly and your daily driving fits within the electric range. Read the guide →
Power of attorneyalso: POA, limited power of attorney, DMV power of attorneyPaperwork: A form that lets the dealer sign title and registration documents for you. It is a normal part of many car deals, especially when a lender holds a title. It should be limited to that one vehicle and to title and registration work, so read what it covers before you sign. Read the guide →
Powertrain warrantyalso: drivetrain warrantyInsurance & warranty: The part of a factory warranty that covers the engine, transmission, and the parts that send power to the wheels. It usually lasts longer than bumper-to-bumper coverage but covers far fewer components. Electronics, air conditioning, and suspension are generally not included. Read the guide →
Pre-approvalalso: preapproval, pre-approved loanFinancing: A lender's conditional offer to lend you up to a certain amount at a stated rate, based on a credit check, before you pick a car. It tells you what you can afford and gives you a rate the dealer has to beat. Get one from a bank or credit union before you visit a dealer. Read the guide →
Pre-purchase inspectionalso: PPI, independent inspection, mechanic's inspectionUsed cars: An inspection of a used car by a mechanic you choose and pay, done before you buy. It can find problems a test drive and a history report will not, and a written report with repair estimates gives you something to negotiate with. If a seller will not allow one, consider that a reason to look elsewhere. Read the guide →
Prepayment penaltyalso: early payoff feeFinancing: A fee some loans charge if you pay them off early. Whether it is allowed, and how it can be calculated, depends on your state and the lender. Ask before you sign, and look for the prepayment section in the contract. Read the guide →
Principalalso: loan balance, principal balanceFinancing: The amount you borrowed that you still owe, not counting interest. Each payment covers the interest due first, and the rest reduces the principal. Paying extra toward principal shortens the loan and cuts total interest, if your lender applies it that way; ask how extra payments are handled. Read the guide →
Private-party salealso: private seller, for sale by owner, FSBOUsed cars: Buying a car directly from its owner instead of a dealer. Prices are often lower, but you usually get no warranty, and you handle the title transfer, tax, and registration yourself. Meet at a safe place, confirm the seller's name matches the title, and get an inspection first. Read the guide →

R

Rangealso: EPA range, estimated range, rated rangeEVs & hybrids: How far an EV can go on a full charge. The EPA-estimated figure on the window sticker is useful for comparing models. Real range changes with speed, temperature, hills, and climate control use, and it is usually lower in cold weather and at highway speeds. Choose a car whose range covers your normal day with room to spare. Read the guide →
Rear-wheel drivealso: RWDThe vehicle: The engine or motor powers the rear wheels. It is common in trucks, sports cars, and many EVs, and it suits towing and balanced handling. It can have less grip on snow and ice than front- or all-wheel drive, so tires matter more. Read the guide →
Rebatealso: customer cash, cash back, bonus cashPricing: Money from the manufacturer that comes off the price for the buyer. A rebate is not a dealer discount, so it should be subtracted after you negotiate the selling price, not used in place of a discount. Some rebates cannot be combined with special financing, so compare both options. Read the guide →
Rebuilt titlealso: reconstructed title, rebuilt salvage, prior salvageUsed cars: A title brand for a salvage car that has been repaired and passed whatever inspection the state requires to go back on the road. That inspection may not cover the quality of the repairs. Expect a much lower value and limits on insurance and financing, and get a thorough independent inspection. Read the guide →
Regenerative brakingalso: regen, one-pedal drivingEVs & hybrids: A system in EVs and hybrids that slows the car by using the motor as a generator, sending energy back into the battery. It extends range, especially in stop-and-go driving, and reduces brake wear. Many EVs let you adjust how strong it feels, up to slowing the car to a stop with only the accelerator pedal. Read the guide →
Registrationalso: vehicle registration, tags, platesPaperwork: The state's record that a car is approved to drive on public roads, tied to your license plates and renewed on a schedule. It is separate from the title, which shows ownership. A dealer usually files it for you; in a private sale or an out-of-state purchase you may need to do it yourself within a deadline your state sets. Read the guide →
Registration feealso: license fee, tag fee, plate feeFees: The government charge to register the car and issue license plates. States calculate it differently, for example by weight, value, age, or a flat amount. The dealer usually collects it and passes it along, so the amount should match what your state actually charges. Read the guide →
Residual valuealso: residual, lease-end valueLeasing: What the leasing company predicts the car will be worth at the end of the lease, usually stated as a percentage of MSRP. It is set by the leasing company and is not negotiable. A higher residual means a lower payment, and it is usually also the basis for the price to buy the car at lease end. Read the guide →
Retail installment sales contractalso: RISC, finance contract, loan contract, installment contractPaperwork: The loan agreement you sign when you finance through a dealer. It shows the APR, finance charge, amount financed, payment, and number of payments, and lists any optional products included. The dealer usually assigns it to a lender, which then collects your payments. Check that every number matches what you agreed to before you sign. Read the guide →

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Safety recallalso: recall, open recallThe vehicle: A notice that a vehicle has a safety defect or does not meet a safety standard, which the manufacturer must fix at no charge. An open recall is one that has not been repaired yet on a specific car. Before you buy, enter the VIN in NHTSA's recall lookup and ask the seller to have open recalls fixed. Read the guide →
Sales taxalso: use tax, excise tax, vehicle taxFees: Tax charged on a vehicle purchase by your state and sometimes your county or city. It is generally based on where you register the car, not where you buy it, and the rate and what is taxed vary by state. Check your state's revenue department or DMV site so you can verify the figure on your paperwork. Read the guide →
Salvage titlealso: salvage, salvage brandUsed cars: A title brand given to a car an insurer declared a total loss, or that was damaged past a threshold set by state law. In most states a salvage car cannot be registered or driven on the road until it is repaired and inspected. Thresholds and rules vary by state. Read the guide →
Selling pricealso: sale price, agreed price, vehicle pricePricing: The price of the car itself that you and the dealer agree on, before taxes, fees, add-ons, and your trade-in are applied. Negotiate this number first and keep it separate from the monthly payment. Then ask for the out-the-door price so you can see everything stacked on top of it. Read the guide →
Simple interest loanalso: simple interestFinancing: A loan where interest is charged each day on the principal you still owe. Most car loans work this way. Paying early or paying extra reduces the interest you pay, and paying late increases it. Read the guide →
Spot deliveryalso: yo-yo financing, conditional delivery, conditional saleAt the dealership: Taking the car home before the dealer has final loan approval from a lender. If the financing falls through, the dealer may call you back to sign a new contract with worse terms or to return the car. Your rights in that situation vary by state. To avoid it, arrive with your own pre-approval or wait for the lender's final approval before you take delivery. Read the guide →
State of healthalso: SOH, battery health, battery degradation, remaining capacityEVs & hybrids: How much energy a battery can hold now compared with when it was new, shown as a percentage. All batteries lose some capacity with age and use, and less capacity means less range. When you buy a used EV, ask for a battery health report from the dealer or manufacturer, and compare the range shown at full charge with the original rating. Read the guide →
Stock numberalso: stock #, inventory numberAt the dealership: The dealer's own ID for a specific car in its inventory. It is different from the VIN, which is the car's permanent ID everywhere. Quote the stock number or VIN in every email so the price you are given applies to one exact car. Read the guide →
Subvented ratealso: special APR, promotional APR, 0% financing, low-rate financingFinancing: A below-market interest rate that the manufacturer subsidizes to help sell a model. It usually requires strong credit, is limited to certain loan lengths, and often cannot be combined with a cash rebate. Run the numbers both ways to see whether the low rate or the rebate saves you more. Read the guide →

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Temporary tagalso: temp tag, temporary plate, temporary registration, paper platePaperwork: A short-term plate or permit that lets you drive a newly bought car while the permanent registration is processed. How long it lasts and who issues it vary by state. If it is close to expiring and your plates have not arrived, contact the dealer or your DMV before it runs out. Read the guide →
Titlealso: certificate of title, pink slipPaperwork: The legal document that shows who owns a vehicle. If you have a loan, the lender is listed on it and may hold it, on paper or electronically, until you pay the loan off. In a private sale, make sure the seller's name is on the title and that it is signed over to you correctly. Read the guide →
Title brandalso: branded titleUsed cars: A permanent note on a car's title that records serious history, such as salvage, rebuilt, flood, or lemon buyback. Brand names and rules differ by state. A branded car is worth much less and can be harder to insure and finance, so check the title and a history report before you pay. Read the guide →
Title feealso: titling feeFees: The government charge for issuing a title in your name. The amount is set by your state and is not negotiable. Look it up on your state DMV site and compare it with what the dealer lists. Read the guide →
Total cost of ownershipalso: TCO, cost to ownPricing: Everything a car costs you over the years you own it: depreciation, interest, insurance, fuel or electricity, maintenance, repairs, taxes, and fees. A car with a lower price can cost more overall than one with a higher price. Compare cars on this total, not on the monthly payment alone. Read the guide →
Total lossalso: totaled, totalInsurance & warranty: When an insurer decides a damaged car is not worth repairing, because the repair cost is too close to or more than its value. The threshold depends on your state and insurer. The insurer pays the car's actual cash value minus your deductible, which can be less than you owe on the loan, and the car usually gets a salvage title. Read the guide →
Trade-inalso: trade, trade-in vehicleTrade-ins: The car you hand over to the dealer as part of the payment for your next one. It is convenient, but a dealer pays a wholesale price, which is usually less than you could get selling the car yourself. Get your trade-in offer in writing and negotiate it separately from the price of the car you are buying. Read the guide →
Trade-in tax creditalso: trade-in sales tax savings, trade-in tax offsetTrade-ins: In many states, sales tax is charged only on the difference between the price of the car you buy and the value of your trade-in. That saving can narrow the gap between trading in and selling the car yourself. Not every state does this, so check your state's rule before you decide. Read the guide →
Trade-in valuealso: trade value, trade allowance, trade-in allowanceTrade-ins: The amount a dealer credits you for your trade-in. The figure on the paperwork can be raised while the price of the new car is raised too, so look at the two numbers together. Get offers from more than one buyer so you know what your car is really worth. Read the guide →
Trim levelalso: trim, gradeThe vehicle: A version of a model with a set bundle of features, such as base, mid-level, or top. Trims can differ in engine, safety equipment, and comfort features, and the price gap between them can be large. Decide which features you really need, then find the lowest trim that has them. Read the guide →
Turn ratealso: inventory turn, days supplyAt the dealership: How quickly a dealer or a model sells through its inventory. Fast-turning models leave little room to negotiate, and slow-turning ones usually come with more discounts and incentives. If the model you want is sitting on lots across your area, you have more leverage. Read the guide →

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Vehicle history reportalso: VHR, history reportUsed cars: A report tied to a car's VIN that gathers records such as title brands, reported accidents, odometer readings, and number of owners. It only shows what was reported, so a clean report does not prove a clean car. Use it together with an independent inspection, not in place of one. Read the guide →
Vehicle service contractalso: extended warranty, VSC, mechanical breakdown protectionInsurance & warranty: An optional plan, sold separately, that pays for certain repairs after or alongside the factory warranty. It is a contract with exclusions, not a true warranty, and may be backed by the manufacturer or a third party. The price is negotiable and you do not have to buy it the day you buy the car. Read what is excluded, who pays the repair shop, and how cancellation works. Read the guide →
VINalso: vehicle identification numberThe vehicle: The unique 17-character ID assigned to every modern car. You will find it at the base of the windshield on the driver's side, on the driver's door jamb, and on the title. Use it to check history reports and open recalls, and make sure the VIN on the car matches the paperwork. Read the guide →

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We-owe formalso: due bill, we owe, owing bill, IOUPaperwork: A signed form that lists anything the dealer has promised to do or provide after the sale, such as a second key, a repair, or an accessory. A spoken promise is hard to enforce once you have driven away. If the dealer owes you anything, get it written here before you sign the rest of the paperwork. Read the guide →