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Your Dealer Dictionary: Making Sense of Car Dealership Lingo

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man at car dealership shopping browsing salesman lingo

Have you ever walking into a tech shop, hardware store, or craft supplies store and felt like a salesperson was speaking an entirely different language? No matter how hard you listened, they kept using terms and phrases which didn’t make any sense to you.

Every industry has its own terminology–a unique collection of slang that’s specific to products and situations in that industry. Even if you don’t work in sales, you undoubtedly use terms in your line of work which most people wouldn’t understand. While using jargon builds community, it often excludes people who aren’t familiar with the business, and that can be troublesome when you’re trying to buy a car.

Here are some basic auto industry terms and insider jargon you could hear the next time you visit a car dealership.

Learn These Terms Before Buying Your Next Car

Ohio lawyer Ronald Burdge made national news for keeping a glossary of lingo used by car dealers, which can be publicly browsed online. For example, a low-baller or a tire-kicker refer to customers who waste the dealer’s time with unreasonably low offers for vehicles, while a chisler is a customer who is skilled at negotiating. Beater, iron, and sled all refer to busted, nonfunctional vehicles. Beware of a five-finger close–when a salesperson hides a portion of a contract from the customer with his hand–or being sealed, when contract documents are given to you in a sealed envelope in the hopes that you won’t read them.

Are the terms “all-new,” “redesigned,” and “refreshed” interchangeable? Because there are no federally- or industry-regulated guidelines for using these labels, they often change between dealerships and brands. “The terms, they vary across automakers,” explained industry expert Dave Sullivan. “It’s really up to the marketing, there’s not one uniform classification that everyone can slot into.” It’s up to you to research how much of a model has actually changed–if it’s brand new, has undergone some minor styling touches, or received a ground-up overhaul.

When you’re looking at cars on the dealership lot, make sure the ones you inspect have a Monroney sticker on them. These are paper-like window stickers which have basic information, such as manufacturer’s suggested retail price (MSRP), fuel economy ratings, and features. You can use the MSRP as a starting point for negotiations if you haven’t researched the going rate already. Sometimes an Additional Dealer Markup (ADM) label is by the Monroney sticker, which appears when a model is in high demand and the dealer raises its price. Dealerships purchase vehicles from manufacturers at dealer cost.

Asian woman at car dealership shopping browsing salesman lingo

What’s the difference between plug-in hybrid electric vehicles (PHEVs) and electric vehicles (EVs)? If you hear the term “electric vehicle,” don’t assume that means it runs solely on battery power. Typically, the term refers to any electric vehicle that can drive purely on electricity for at least a short time. PHEVs can do this for a limited time, but have a gasoline engine supporting the electric motor. This results in high fuel economy ratings by combining the best of both worlds. However, not all hybrids will run on battery power if they run out of gas.

Buying a car involves a lot of fees that are rarely explained. Documentation fees are charged by the dealership to fund paperwork and processing, and are non-negotiable. Destination fees are also set in stone; this is the fee that the manufacturer charges the dealership to have vehicles shipped to its location. Dealer prep and advertising fees are both based on pre-sale service and publicity fees, and can often be adjusted.

Once you’ve decided on the final price and are negotiating, prepare to talk about financing and insurance (F&I) and annual percentage rates (APR)–the interest rate on loans.

There are numerous other terms out there, many of them you can find at Ronald Burdge’s website. What are some of the insider terms you’ve learned?

News Sources: Automotive News,, WPRI, & Clean Technica