| Base price - The price of the vehicle
without any options, destination charges, taxes
or other fees added. Includes standard features.
Corporate twins or sisters - Vehicles
similar in body style and mechanical components
that differ mainly in the attached manufacturer's
nameplate.
Credit life insurance - An insurance policy
designed to pay off your auto loan if you die
before the loan is paid in full.
Customer satisfaction index (CSI) - A
rating of dealerships by vehicle manufacturers,
based on customer surveys.
Depreciation - The amount a vehicle decreases
in value with time; varies according to vehicle
condition, its optional equipment, where you sell
the vehicle and to whom you sell it to.
Destination charge - A charge for shipping
the car from the manufacturer or, for foreign
cars, port of entry, to the dealer; usually the
same anywhere in the U.S., although it may vary
in some locations.
Dealer preparation charges - An additional
charge that dealers may add to the sticker price
of the car for getting it ready for sale; unnecessary,
since most auto manufacturers pay dealers to "prep"
their cars for sale.
Extended warranty - Service contracts
sold at an extra charge, designed to extend the
standard warranty; may be limited in the components
it covers.
Invoice cost - The dealer's cost to buy
the vehicle or factory-installed options; excludes
any manufacturer's incentives.
List price - The retail, or asking price
of the car, including all options installed at
the factory. The price on the manufacturer's window
sticker, which is federally mandated on all new
cars and light trucks sold in the United States.
Luxury tax - Applicable to cars which
actually sell for over $36,000. A federal tax
equal to 7 percent of the difference between the
selling price of a car and $36,000
MSRP - Manufacturer's suggested retail
price. See list price.
Option package or group - A set of options
that can be purchased only as a package, and which
may or may not come with a discount.
Pack - An option package installed by
the dealer or distributor rather than the manufacturer;
usually high-profit items that provide little
benefit.
Program cars - Cars that an auto manufacturer
sells to rental companies with an agreement to
buy them back after several months, may represent
a good value, but watch for high mileage and the
amount of original warranty left.
Rebate - A special payment from the manufacturer
to the customer or dealer for specific models
or cars designed to boost sales.
Sticker Price - The price of the car listed
on the window sticker; includes the list price
as well as additional options or services added
by the dealer. See list price and invoice cost.
Trim line - Different models of the same
car equipped with different standard equipment
and/or finished off with unique trim or paint
treatments.
Warranty - A limited promise by a manufacturer
that certain problems occurring on a vehicle within
a set time period or number of miles will be corrected
by the manufacturer or dealer. This does not include
required maintenance. |
Buying
A Car
Buying
A Car
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