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GlossaryofAutomotiveTerms
TheRadioAdvertisingBureauhascreatedthisglossaryofcommonlyusedAutomotive industry terms from a variety of sources, includingconversationswithdealers. Thepurpose istoacquaintRadiosalespeoplewithdealersvocabularysowecanbettercommunicatewith localRadioslargest ad category. Radio language, such as Average Quarter Hour,rankers,CumeandTSLarenotnearlyasimportanttodealersastheirownterms.Youmayusethesetermsasareference,butbetteryet,get familiarwiththemsoyouareabletousethemwithinyourClientNeedsAnalysis(CNA)questions and conversations with dealers. You will improve yourrelationships and develop more of a rapport with auto dealers, andsubsequentlyclosemorebusiness.
RadioAdvertisingBureauIrving,TX75038www.rab.com
18002323131
GLOSSARYOFAUTOMOTIVETERMS
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AbsorptionRate
Thepercentageofadealershipsfixedcoststhatarecoveredbyserviceandpartsrevenue.
AdaptiveCruiseControl(ACC)
TheACCsystemscanstheareaaheadofacarforobjectsmainlyothercarsandappliesthebrakesautomaticallyifacollisionislikelytooccur.
AddOnsProductsorservicesaddedbydealerships.Commonexamplesarepinstriping,rustproofing,alarmsystems,electronicequipment,andextendedwarranties.Addonscanreallydriveupthestickerpriceofavehicle,buttheiractualcostisusuallynegotiable.
AdjustedCapitalizedCost
Thedifferencebetweenthegrosscapitalizedcostandthecapitalizedcostreduction.Thisistheamountusedtocalculatealeasepayment.
AdvancedVehicleControlSystems(AVCS)
Vehiclesystemsthatautomatecurrentfunctionssuchasdistancekeeping,lanechanging,andrampmerging.
AdvertisingFee
Anamountchargedthebuyertocoverthecostofnationalandlocaladvertising.Manyexpertssuggestthatthisfeeshouldbenomorethan1.5percentofthemanufacturer'ssuggestedretailprice(MSRP).
Aftermarket(ReplacementMarket)
Replacementoraddonpurchasesforaproductafteritsoriginalsale.Theautomotiveaftermarketincludesreplacementparts,accessories,lubricants,fuel,appearanceproductsandrepairs.
GLOSSARYOFAUTOMOTIVETERMS
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AmountFinanced
Theagreeduponsalepriceofthevehicle,plusanychargesfortaxes,title,licensefees,servicecontractsandinsurance,lessanydownpaymentand/ornettradeinallowance.Thisistheamountwhichissubjecttofinancecharges.
AnnualPercentageRate(APR)
Thetotalamountoffinancechargesexpressedasatruepercentageofthedecliningunpaidbalance.
AntiLockBrakingSystem
Abrakingsystemthatsenseswhenanyofthewheelshavelockedup,orareaboutto,andautomaticallyreducesthebrakingforcestokeepthewheelsrolling.CommonlycalledABS,suchasystemcancontrolallfourwheelsoronlytwo.
AutoDealerFinance&InsuranceDepartment
TheF&Idepartmentatatypicalautomobiledealeroffersvehiclefinancingandinsuranceoptionstocustomers,detailsthedealershipsaftermarketproductsandextendedwarranties,andprovidesacompleteexplanationofmanufactureranddealershipserviceproceduresandpolicies.
AutoDealerServiceDepartment
Servicedepartmentsatvehicledealersproviderepairservicesandsellaccessoriesandreplacementparts.Whilemostservicedepartmentsperformrepairsonly,somedealersalsohavebodyshopstodocollisionrepair,refinishing,andpainting.Theworkoftheservicedepartmenthasamajorinfluenceoncustomerssatisfactionandwillingnesstopurchasefuturevehiclesfromthedealer.
AutomaticHighwayAdvisoryRadio(AHAR)
Americantrafficinformationbroadcastingsystemwhosetransmissionsarereceivedthroughcarradioswhichautomaticallyinterruptotherradioreceptionandtunetothecorrectstation.
AutomatedVehicleIdentification(AVI)
Asystemthatcombinesanonboardtransponderwithroadsidereceiversforelectronictollcollection(ETC)andstolenvehiclerecovery.
GLOSSARYOFAUTOMOTIVETERMS
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AutomaticClimateControl
Aheatingandairconditioningsystemthatadjustsitselfasneeded,tomaintainapresettemperature.
BackEnd
AlsoknownasBackEndGrossorBackroom.Anymoneythedealermakesthatisnotpartoftheactualsaleofacar.Thisincludesfeesforoptionsoraccessoriesthatcanbeboughtlateronanaftemarketbasis.
BalloonContract
Aloanthatisamortizedonlydowntotheexpectedendtermvaluewitharemainingbalancetobepaidinalumpsumattheendoftheterm.
BasicWarranty
Thetermsestablishedbyeachmanufacturertorepairvehicleswithinaspecifiedmileageand/ortimeperiod.Allfactoryinstalledandsomedealerinstalledpartsarecoveredunderthiswarranty.
BlueBook
OfficiallynamedTheKelleyBlueBook,thisreferenceistypicallyusedbyconsumerstolookupthefairmarketpriceofthewholesale,retailandloanvaluesofautos.
BluetoothCapability
TheabilityofaradiosystemtoworkwithBluetoothwirelessconnectivity,tofunctioninconcertwithacellularphone.
BodyType
Thedistinguishingcharacteristicsofacar,suchasthenumberofdoors,windows,wayitcarriescargo(hatchback,sedan,fastback,sport,etc.).
Buyer'sMarket
Aneconomicmarketwhereconditionsareinfavorofthebuyer.
C.S.I.(seeCustomerSatisfactionIndex)
GLOSSARYOFAUTOMOTIVETERMS
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CAFE
CorporateAverageFuelEconomy(CAFE)isthesalesweightedaveragefueleconomy,expressedinmilespergallon(mpg),ofamanufacturersfleetofpassengercarsorlighttruckswithagrossvehicleweightrating(GVWR)of8,500lbs.orless,manufacturedforsaleintheUnitedStates,foranygivenmodelyear.Fueleconomyisdefinedastheaveragemileagetraveledbyanautomobilepergallonofgasoline(orequivalentamountofotherfuel)consumedasmeasuredinaccordancewiththetestingandevaluationprotocolsetforthbytheEnvironmentalProtectionAgency(EPA).
CapitalizedCostReduction
Theamountofanynettradeinallowance,rebate,noncashcredit,orcashwhichispaidthatreducesthegrosscapitalizedcost.Thisissometimesreferredtoasadownpayment.
CaptiveFinanceCompany
Afinancecompanythatisseparatefromadealershipbutisownedbyaparentcompany.Automobilemanufacturershaveestablishedcaptivefinancecompaniesforthepurposeoffinancingautosforconsumers.Thesefinancecompaniesareabletofinanceanyvehiclenotjustthespecificmanufacturer'sproducts.Often,adealerwillgivethechoiceofaspecialdealerfinancerateoramanufacturer'srebate.Inmanycases,therebatewillbeabetterdeal.
CarLeaseSwap
Thetransferofanautoleasetoanotherparty,suchasaleasingcompany,beforetheleaseisfinished.
CertifiedPreOwnedVehicle
Manymanufacturershavecertifiedpreownedprogramsthatpromoteusedvehiclesthatmeethighstandardsdefinedbythemanufacturer.Eachprogramhasadifferentcertificationprocess.
ClosedEndLease
Atypeofleaseinwhichthelesseeisnotresponsibleforthevalueofthevehicleattheendofthelease.Thelesseeisliableforexcessmileageandexcessivewearanduse.Thisisalsocalledaguaranteedtradein,netlease,orwalkawaylease.
GLOSSARYOFAUTOMOTIVETERMS
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CollisionInsurance
Insurancewhichcoversdamagetoavehiclethatresultsfromacollisionwithanothervehicleorobject.Differentthancomprehensiveinsurance.
CompactCarAsmallcarthatcanseattwotofourpeople.
ComprehensiveInsurance
Insurancewhichcoversdamagetoavehiclecausedbyeventsotherthanacollision,suchasflood,fire,hail,theft,orvandalism.Differentthancollisioninsurance.
CrossoverUtilityVehicle(CUV)
ACUVisavehiclethathasSUVlikefunctionandutility,butwithachassisanddrivetrainmoresimilartoacarthanatraditionaltruckbasedSUV.Havingtheunderpinningsofacarequatestoamorecomfortablerideanduseableinteriorroom,aswellastypicallybettergasmileagebecauseoflighterconstructionandsmallerengines.
CustomerSatisfactionIndex(CSI):
Areport,preparedbyaresearchfirmsuchasJ.D.PowerandAssociates,detailinghowcustomersratethedealershipssalesandservicedepartments.
DealerHoldback
IsapercentageofthetotalMSRPthatthemanufacturerholdsandthengivesbacktothedealer,oftenattheendoftheyearorquarter.
DealerIncentives
Areunadvertisedcashincentivesgivenbythemanufacturertothedealertohelpboostthesalesofaparticularmodelthatmayormaynotbesellingwell.
DealerInvoicePrice
Alsocalleddealercost.Theamountthedealerpaysforacarortruck.Deductedfromthispricemaybeadealerincentive,whichisasetdiscountofferedforalimitedperiodoftime,oradealerholdback,whichisapercentageofthevehicle'swholesaleprice.
GLOSSARYOFAUTOMOTIVETERMS
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DestinationCharge
Destinationchargeistheamounttheautomakerchargesthedealertodeliveranewvehiclefromthefactory.Thischargecanvaryamongautomakersaswellasamongdifferentvehicles.InmostcasesthedestinationchargeforagivenvehicleisthesametoanypointintheUnitedStates,whetherthecarhastotravelacrosstowntoadealerinDetroit,oracrossthecontinenttoadealerinLosAngeles.Sinceitisafixed,unavoidablecosttoadealer,destinationchargesseldomcanbenegotiated.
DetailingService
Specializedcleaningofvehicleinteriorandexterior.Includescleaningofupholsteryandenginecompartment,vacuuming,washingandwaxing.
DieselEngine
Aninternalcombustionengineinwhichthefuelisinjectedintothecylinderneartheendofthecompressionstrokeandisignitedbytheheatofthecompressedairinthecylinder.Nosparkplugorcarburetorisneeded.
DigitalAudioBroadcast(DAB)
Adigitaltechnologyofferingconsiderableadvantagesovertoday'sFMradio,bothtolistenersandbroadcasters.ThemostobviousbenefittolistenersisDAB'sabilitytodeliverCDqualitystereosoundrobustlyandreliably,eventomobilereceivers,usingonlyasimplerodantenna.FMreceptionisoftendistortedorinterruptedbymultipathinterferenceinmovingvehiclesinparticular,asreflectionsfromhillsandbuildingsarriveoutofphasewiththemainsignal.Bycontrast,theDABreceiver'spowerfulprocessorusethese"shadows"toreinforcethemainsignal.
DirectFinancing
Arrangingaloandirectlythroughabankorcreditunionratherthanthroughthedealer.
DoItYourselfMarket(DIY)
Thevehiclemaintenanceandrepairsconductedbythevehicleownerorfriend/relativewhopurchaseautopartsfromaretailoutlet.
GLOSSARYOFAUTOMOTIVETERMS
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DownPayment
Theamountofcashornettradeinallowanceappliedtoreducethecashsalespriceofavehicle.Mostretailtransactionsrequireadownpaymentof10to15percentoftheamounttobefinanced.However,therequireddownpaymentcanbelessdependingontheindividualscreditstanding,abilitytorepayandothercriteria.Adownpaymenthelpslowerthemonthlypaymentaswellasestablishequityinthevehicle.
DualZoneClimateControl
Allowsindividualizedcontrolofheatingandairconditioning.Mostsystemsareadjustableforthedriverandfrontpassenger;othersfeatureathirdadjustmentforrearpassengers.
DueatSigning
Theamountofmoneypaidtoacarleasingcompanywhenanautoleaseissigned.
EarlyTermination
Whenaleaseisendedbythelesseereturningtheleasevehicletothelessorbeforeitsscheduledmaturitydate.
EarlyTerminationFee
Afeechargedbycarleasingcompaniesforendingacarleasebeforetheendofthepredefinedleaseterm.
ElectricVehicle
Anautomotivevehiclethatispropelledbyoneormoreelectricmotorspoweredbyaspecialrechargeableelectricbattery,ratherthanbyaninternalcombustionengine.
ExcessMileageCharge
Leasesgenerallycontainamileagelimitationtopreventexcessmileagefrombeingdriven,andtherefore,excessdepreciationofthevehicle.AsetmileageallowanceisstipulatedinaTMCCleaseagreement.Ifthislimitisexceeded,thelesseeischargedforeachmiledrivenexceedingtheallowablemileage,asspecifiedinthelease(e.g.,$0.10permile).However,ifatleaseinceptiontheindividualfeelstheywillbedrivingmorethanissetforthinthelease,theycanaddtheanticipatedexcessmileage(at$.10permile)totheleasetobepaidaspartofthemonthlypayment.
GLOSSARYOFAUTOMOTIVETERMS
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ExcessiveWearandUse
LeasescontainspecificstandardsforexcessivewearandusebaseduponTMCC'sstandards.Includedaresuchitemsasmissingparts,scratches,dents,mismatched/baldtires,crackedglass,ripped/torn/burnedinteriorandinoperablemechanicalparts.Attheendofthelease,ifthelesseedoesnotpurchasethevehicle,thelesseemusteitherrepairtheexcessivewearanduse,orpaythelessortheestimatedcostofrepairs.
ExtendedWarranty
Acontractthatprotectsthecarowneragainstmechanicalfailuresandbreakdowns.ExtendedwarrantiesarealsoreferredtoasVehicleServiceContracts.Thiswarrantywillpayforcoveredrepairsafterthemanufacturer'swarrantyhasexpired.
F&I(seeFinance&Insurancebelow)
Finance&Insurance
TheFinanceDepartmentinadealership,sometimescalledtheBusinessOffice,orcommonlycalledF&IDepartment,isdesignedtosellautoloansandinsuranceataprofit.Italsosellsotheraddons,suchasextendedwarrantiesorcustomaccessories.DealersoftenmakemoreprofitonF&Ithanonsellingavehicle.
Floorplan
Dealerfloorplaninterestistheinterestthatdealerspayforloanstobuythecarsontheirlot.Usuallythefactorypaysthisaspartoftheholdback,itemizedasaseparateinvoiceitem.
FourWheelDrive(4WD)
Aparttimesystemthattransfersenginepowertoallfourwheels.4WDsystemsusuallylackacenterdifferentialthatallowsuseindryconditions.4WDprovidessuperiortractioncomparedwithfrontorrearwheeldrive.
FrontWheelDrive(FWD)
Thefrontwheelsreceiveenginepower.FWDprovidesmoretractionthanrearwheeldrive(RWD)inpoorroadconditionsbecausemoreweightisoverthedrivewheels.FWDalsoallowsbetteruseofinteriorspacethanRWD.
FullSizeCarAcarthatisusuallyfourdoorsandseatsuptosevenpeople.
GLOSSARYOFAUTOMOTIVETERMS
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GuaranteedAutoProtection(GAP)Insurance
Atypeofinsurancethatcoverstheamountofmoneyowedonaleasethatisnotcoveredbystandardautoinsurance.Gapprotectionappliesonlyiftheleaseisterminatedinvoluntarilyandearlierthanmaturitydateoftheleasebecausetheleasedautowasstolenorsignificantlydamagedinanaccident.It'simportantprotectiontohavebecausetheactualcashvalueofthecarpaidbyastandardautoinsurancepolicymaynotbeadequatetopaythepayoffbalanceandearlyterminationpenaltiesofthelease.Theprotectionshouldn'tcostmorethanafewdollarsamonth.
GeneralServiceParts
Sparkplugsandelectricalparts(tuneupkits,wiring,switches);filters(oil,airandgas);batteries;beltsandhoses;engineaccessories(speedcontrol,carburetors,oilandwaterpumps,alternators).
GlobalPositioningSystem(GPS)
A"constellation"of24satellitesthatorbittheEarthandmakeitpossibleforpeoplewithgroundreceiverstopinpointtheirgeographiclocation.TheGPSisownedandoperatedbytheU.S.DepartmentofDefensebutisavailableforgeneralusearoundtheworld.
GrossCapitalizedCost
Theagreeduponvalueoftheleasevehicle(includingdealermarkup),plusanyitemsyoupayforovertheleasetermsuchastaxes,servicecontracts,insurance,andanypriorcreditorleasebalance.
GrossProfit
Theamountofprofitthatisrealizedonadealpriortodeductingsalesanddeliveryexpenses.
GuaranteedLoan
Whenalenderoffersaloanwiththeunderstandingthattheloanisguaranteedtoberepaidbyanotherpartyiftheborrowerdefaults.
HardParts
Solidengineparts,includingcrankshafts,pistons,flywheels,etc.
GLOSSARYOFAUTOMOTIVETERMS
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HDRadio
HDRadiosimultaneouslytransmitsadigitalversionoftheanalogbroadcastandalsoprovidesaseconddigitalchannel,whichcanbeusedforalternateRadioprogrammingordataservicessuchassonginformation,weatherreportsandcarnavigationupdates.DigitalRadioprovidesanimprovementinsoundqualityovertraditionalanalogRadio.
HeavyDutyTruck
Vehicleweighingfrom26,001to33,001lbs.Alsoincludesoffhighwaytrucks.
HeavyParts
Chassis(shockabsorbers,mufflersandexhaustsystemproducts,struts);drivetrain(Ujoints,transmissionparts,clutches);brakeparts(brakeparts,rotors,discs);crashparts(bodyrepairkits,fendersandbumpers;fiberglasspanels;glass).
Holdback
Holdbackismoneythedealershipreceivesfromthemanufacturerafteravehicleissold.Holdbackisoften2%to3%oftheinvoiceprice.
HomeOfficeComplaints(HOC)
Inadditiontoreflectingunfavorablyondealerssalesandservicedepartments,dealerincentivesaresometimestiedtothesecustomersexperiences.
HybridVehicle
Ahybridelectricvehiclecombinesaninternalcombustionengineandanelectricmotorpoweredbybatteries,mergingthebestfeaturesoftoday'scombustionenginecarsandelectricvehicles.Thecombinationallowstheelectricmotorandbatteriestohelptheconventionalengineoperatemoreefficiently,cuttingdownonfueluse.Meanwhile,thegasolinefueledcombustionengineovercomesthelimiteddrivingrangeofanelectricvehicle.
Incentives(seeDealerIncentives)
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Infotainment
Thetelematicsmarketisslowlyevolvinginto"infotainment"(informationandentertainment)tocombineeverythingfromsafetyandsecuritytoroutingandentertainment,includingInternetaccessandvideogames.Vehiclemanufacturersincreasinglyofferinfotainmentsystemseitherasoriginalequipmentoroptionalpackages.
InVehicleSigning
Onboarddisplayofroadsidesigninformation.Theinformationcanbeobtainedeitherbyshortrangetransmissionfromroadsidebeaconsorfromonboarddatastorage.Invehiclesignsareutilizedtoimprovedrivereffectiveness,especiallywhendrivingatnightorduringinclementweatherconditions.
Inventory
Referstothenumberofunsoldvehiclesthatarecurrentlyonadealershipslot.Cardealersordertheirinventorybasedontheirreadingofthemarketplace,howwellcertainmodelshavesoldinthepast,andonfeedbackfromconsumers.
Invoice
Thebillingpricethatadealerpaysforanewcarfromthefactory.
KeylessEntrySystem
Asystemwhichallowsdriverstolockandunlocktheirvehicle'sdoorsandtrunkwithoutusingakey.Onesystemisoperatedbypunchingatypicallyfivedigitcodeintoacalculatorstylekeypadlocatedonthedriver'sdoor;ifmorethanfivesecondselapsebetweenbuttonpushes,thesystemwillabort,requiringyoutostartagain.Anothersystemusesadedicatedfrequencyinaspecialkeyfob.
Lease
Acontractbetweenlessorandlesseeforaspecifiedtimeperiodandaspecificpayment.Thetitletothecarremainsinthenameoflessorasownerunlessanduntilthelesseeexerciseshis/herpurchaseoption.
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LeaseBuyBack
Aleasebuybackisacontractthatistypicallyenteredintobyalessee(theindividualwhowillbedrivingthegivenvehicle)andalessor(theindividualorcompanythatactuallyownsthevehicle).Thelesseeisagreeingtopayfortheuseofthevehicleovertheperiodofthelease.Thelesseealsoassumesfinancialresponsibilityforanydamagedonetothevehicleovertheperiodofthelease.Atleaseend,thelesseemustreturnthevehicletothelessor,unlessthelesseedecidestopurchasethevehicleatleaseend.
LeaseInceptionCash
Thetotalamountofmoneythecustomerneedstopaywhenstartingacarlease.Thisincludesfirstmonth'spayment,anytaxandtitlefees,downpayment(e.g.,capitalizedcostreduction),andsecuritydeposit.
LeaseInsurance(alsoseeGAPInsurance)
Thelesseeisgenerallyrequiredtopurchasecollisionandcomprehensiveinsurancecoveragebytheautodealerorbankthatisfinancingthecar.Thesecoveragesareinadditiontotheothersthatmaybemandatoryinaparticularstate,suchasautoliabilityinsurance.Insuranceforleasedvehiclesistypicallymoreexpensivethannormalcoverage.
LemonLawVehicle
Avehiclewithmajorproblemsthathasbeenrepurchasedbyorhaditspricerenegotiatedwiththemanufacturer.Thestatemarksitsofficialrecordsorissuesatitlebrandforlemonlawvehicles.Lawsvarybystateastothespecificrequirementsfora"lemon."MostmanufacturersissuesomebuybacksthatarenottheresultofLemonLawsbutratheracourtesy.
Lessee
Thecustomerwhosignsaleasewiththelessorandpaysforuseofthevehicle.
Lessor
Thepartyleasingthevehicletothelessee,theactualownerofthevehicleandthelease(i.e.,leasingcompany,dealerorfinancialinstitution).
GLOSSARYOFAUTOMOTIVETERMS
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Lien
Aclaimagainstavehiclebyanotherpartywhichutilizesthevehicleassecurityforrepaymentofaloanorotherclaim.Usuallyaffectstheabilitytotransferownership.
LightTruck
Vehicleweighinglessthan14,000lbs.
LoantoValueRatio(LTV)
Aratiodeterminedbydividingthesalespriceorappraisedvalueintotheloanamount,expressedasapercentage.Forexample,withasalespriceof$10,000andanautoloanof$8,000,theloantovalueratiowouldbe80percent.
Manufacturer'sSuggestedRetailPrice(MSRP)
Theretailpriceofthevehicleasrecommendedbythemanufactureroftencalledthestickerorlistprice.
ManufacturerRecall
Automobilemanufacturersissuerecallnoticestoinformownersofcardefectsthathavecometothemanufacturer'sattention.Recallsalsosuggestimprovementsthatcanbemadetoimprovethesafetyofaparticularvehicle.Mostmanufacturerrecallscanberepairedatnocosttotheowner.
Markup
Theamountofprofitreceivedbythedealeroneachcar.Markupcanbecalculatedbysubtractingthesellingpricefromtheinvoiceprice.
MediumDutyTruck
Vehicleweighingfrom14,001to26,000lbs.
MidSizeCarAmediumsizecardesignedtoseatfourtosixpassengers.
ModelYear(MY)
Usuallydefinedastheyearaftertheactualavailabilityofaparticularvehicle.Forexample,acarintroducedin2007willusuallybecalledaModelYear2008vehicle.
GLOSSARYOFAUTOMOTIVETERMS
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MP3Capability
TheabilityofaRadiotoplaycomputergeneratedMP3music,aswellasCDsand/orcassettes.
NationalAutomobileDealersAssociation(NADA)
Atradeassociationrepresentingfranchisednewcarandtruckdealers.
NationalIndependentAutomobileDealersAssociation(NIADA)
Atradeassociationrepresentingindependentautomobiledealerships.
NationalVehicleLeasingAssociation(NVLA)
Atradeassociationofvehicleleasers,dealers,andfunders.
NationalRebateAmount
Automakersproviderebatesandincentivestoencouragevehiclesales.Nationalrebatesandincentivestypicallytaketheformofcashorspeciallowinterestrates.Thelistedprogramsapplytothisvehicleinallpartsofthecountry.
NavigationSystem
Anelectronicmapcombinedwithrouteinstructions,usuallydisplayedonadashboardvideoscreen.Thesystemcommunicateswithasatellitetodisplay,onthescreen,thevehicle'sgeographiclocationanddirectionoftravel.Navigationsystemsareusuallyoptional,thoughsomeluxurymodelshavethemasstandardequipment.
NetProfit
Dealershippretaxnetprofitsarederivedfromsubtractingoverallexpensesfromthetotaloperatinggross.
NoFaultInsuranceAtypeofinsurancewherebothpartiesinanaccidentfileclaimsregardlessoffault.
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OffLeaseVehicleOffleasevehiclesarevehiclesthatarereturnedattheendofaleaseterm.Usually,anoffleasevehicleiseithersoldtothelesseebythedealershiporfinancialinstitutionthatoriginatedthelease,auctionedoff,orsoldasausedvehiclebythedealer.OnBoardDiagnostics
AunitthatmonitorstheElectricControlUnitandsystemresponsesforerrorsduringnormalvehicleoperations.Whenthevehicleisserviced,thisinformationontheerrorscanbedownloadedanddisplayedtotheservicepersonnel,whichwillfacilitatethetroubleshootingprocess.
OpenEndLease
Aleasewhichrequiresthelessee(thepersonleasingtheauto)topayanydifferencebetweentheresidualvalueoftheautoandthefairmarketvalueoftheautoattheendofthelease.Theriskofpayingdepreciationgreaterthananticipatedandstatedintheleaseatthetimeoftheleasenegotiationisassumedbythethelessee,notthelessor(orcompanyleasingthecar).
Pack
Packingorloadingpaymentsisaslangtermusedtodescribeapracticeusedbytheautoindustrytogetcustomerstoagreetopurchaseadditionalproducts,suchascreditinsurance,servicecontracts,chemicalprotectants,andsecuritydevices,withoutrevealingtheirtrueimpactontheirmonthlypayments.
PreparationCharges
Chargesimposedbyadealerforpreparinganewlypurchasedcarfordeliverytothebuyer.Includesfillingthegastank,verifyingappropriatefluidlevels,lastminutetouchupcleaning,etc.
PurchaseAgreement
Acontractsignedbythebuyerandsellerthatindicatestheconditionsunderwhichanitemorpropertywillbesold.
PurchaseOption
Anoptioninaleasewhichallowsthelesseetopurchasethevehicleattheendoftheleasetermforaspecifiedprice.
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QuickLube
Serviceestablishmentsspecializinginprovidingfastoilchanges.Mayalsoofferotherautomotiveservices.
RadioDataSystem(RDS)
RadioDataSystem.RDStunerscanautomaticallytuneinstationsaccordingtothetypesofmusic(ortalk)theybroadcast.RDSalsoenablesareceivertodisplaytextmessagesandevengraphics(usuallycalllettersandformatinformation)thatmanyFMstationsincludeonasubcarriersignalwithintheirnormalbroadcastsignal.SomeRDSequippedtunerscanevenoverridewithtrafficalertsoremergencybroadcasts,duringplaybackofothermedia.
RDR(seeRetailDeliveryRegistration)
RealTimeTrafficInformation
ThissystemcanworkwithsatelliteRadiotowarnthedriveriftrafficconditionsaheadaretroublesome.Itcanthendetermineifanalternateroutemightbeabetterchoice.
RearObstacleWarningSystem
Alertsthedrivertounseenobjectsbehindthevehiclewhenbackingup.Sensorsmountedintherearbumperdetectthepresenceofnearbyobjects.Atoneorwarninglightssignalthedistancetotheseobjects.Somesystemsalsowarnofnearbyobjectsinfront.
RearSeatEntertainmentSystem
Allowsrearseatpassengerstoviewvideo.AnoptionmostoftenofferedonmininvansandSUVs.EarlierentertainmentsystemsplayedVHSvideotapes,butmostofthecurrentonesplayDVDs.
RearWheelDrive
Therearwheelsreceivealltheenginepower.RWDispreferredoverfrontwheeldrive(FWD)foritssuperiorhandlingandaccelerationcapabilities.RWDprovideslesstractionthanFWDinpoorroadconditionsbecauselessweightisavailableoverthedrivewheels.
Rebates/Incentives
Rebatesandincentivesareprovidedbytheautomakertohelpencourageadditionalvehiclesales.Thesetypicallytaketheformofcashorspeciallowinterestrates.
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RegionalIncentives
Regionalincentivesusuallyareintheformofcashorspecialfinancing,andapplytospecificareasorstatesofthecontinentalUS.NationalincentivesapplytotheentirecontinentalUS.Anationalincentivecannotbecombinedwitharegionalincentive.Incentivesthatapplytoaparticularregionofthecountrywillsupersedeincentivesofferedatanationallevel.
ResidualValue
Theleaseendvalueofthevehiclesetatleaseinceptionbythelessor.It'susuallycalculatedasapercentageoftheMSRP.Thisisusedasacomponentofthepaymentcalculation.
RetailContract
Contractrepresentingthetimesaleofavehicletoacustomer.
RetailDeliveryRegistration
Registrationbythedealerwiththemanufacturerwhenavehicleissold.SomemanufacturersusedifferentphrasessuchasManagementInformationSystem(MIS)orDailyOperatingControl(DOC).Theprocessallowsmanufacturerstotrackdealerretailvehiclesales.
RefundableSecurityDeposit
Anamountcollectedbythelessoratthebeginningoftheleasetoensurethelessee'scompliancewiththetermsofthelease.Thesecuritydepositisgenerallyrefundableatleaseend,providedtherearenoexcessmileage,excessivewearandusecharges,outstandingparkingtickets,orunpaidleasepayments.
RouteGuidanceDatabase
Thedetailedinformationrequiredforacomputertogenerateahighqualitydrivingroutebetweentwolocations.Informationincludesgeometry,streetnames,addresses,speedlimits,turnrestrictions,onewayrestrictions,roadlevels,androadwayconnections.
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SatelliteRadio
Twosystems,XMandSirius,provideradioreceptionviasatellitesratherthanthecustomarybroadcastmethod.Eachservicechargesamonthlyfeefordeliveringalargenumberofentertainmentchannels.Satellitereadyradiosarestandardinsomevehiclesandoptionalformanymore.
ScheduledTermination
Theendoftheleaseterm,ascalledforinthelease.Itisalsoreferredtoasthescheduledmaturitydate.
Seller'sMarket
Aneconomicmarketwhereconditionsareinfavoroftheseller.
Standard
Thisreferstoequipmentthatisincludedinthebaselistpriceofanautomobile,andcanvaryaccordingtothevehicle.Featuresthatareoptionalonmostlesserpricedmodelsarestandardonmanyluxuryofferings.
StickerPrice(seeManufacturersSuggestedRetailPrice)
T.O.(seeTurnover)
TalkingWarningSystem
Usingthecarradiospeakers,thismicroprocessorbasedsystemtellsthedriverthesourceoftheprobleminaclear,pleasant(female)voice.Iftheradioisonatthetimeofthealert,thecomputerautomaticallyturnsdownthevolumesothewarningcanbeheard.
Telematics
Telematicsfortheautomotiveindustrycoversacombinationofwirelessvoiceanddatacommunicationsystemsaimedatprovidingdriverswithsafetyandinformationincludingautomaticairbagdeploymentnotification,vehicletracking,personalizedinformation,realtimetrafficdata,emergencyaid,andentertainmentfromacentralservicecenter.InnovativefeaturesincludeInternetaccess,voiceactivation,andtheabilitytocontrolthecaraudioandclimatecontrol.
GLOSSARYOFAUTOMOTIVETERMS
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TelematicsControlUnit(TCU)
Theembeddedvehiclecontrolunitthatcommunicateswiththeautomobilecontrols,GPSsatellite,andcustomerservicecentertoprovidetelematicsfeaturestoadriver.
Term
Thelengthofaleaseagreement.Typicalleasinglengthsare24,36,48and60months.However,sometimesleaseagreementsarefor36,38or40months(tomaketheleasepaymentsappearsmaller).
TotalCostofOwnership(TCO)
TotalCostofOwnershipisthetotalexpectedownershipcosttoownandoperateavehicleforfiveyears.TheTotalCostofOwnershipcalculationincludesdepreciation,financing,insurance,statefees,fuel,maintenanceandrepairs.
TotalOutofPocketCost
Thisisthetotalofallmonthlypayments,anyleasefeesanddeposits,andanycapitalcostreduction(excepttax,license,andregistration)fromleaseinceptiontoclosure.
Tower
Inatowerstore,managementsitsandmonitorsthefloorforsalesactivity(socalledbecauseitisusuallyelevatedslightlyabovetheshowroomfloorlevel).SalesandF&Inumbersareusuallymonitoredand/ormanipulatedfromthetowerscomputer.
TractionControl
Ageneraltermforlimitingwheelslipunderacceleration.Tractioncontrolsystemsusuallyapplybrakesandreducethrottlewhenwheelslipisdetected.
Tradeinvalue
Thevaluethatacardealershipwillgiveforanexistingcarasadepositonanewcar.
TurnandEarn
Turnandearnisacriticalpartofthecarbusiness,andbasicallydescribesthesystemallmanufacturersusetoallocatewhichdealerreceivesinventoryeachmonth.Turndescribesadealerssales:Howmanyvehiclesdidtheyturnintodeliveriesforaparticularmonth?Thisdetermineshowmanyvehiclesthey"earn"fromthenextvehicleallocation.
GLOSSARYOFAUTOMOTIVETERMS
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TurnByTurnRouteGuidance
Amethodofprovidingrouteguidancebysequentiallydeliveringupcomingmaneuverinformationtothedrivervisuallyand/oraudiblyastherouteisdriven.
Turnover(T.O.)
Alsoknownas"turning,"thisisthepracticeofpassingacustomerfromonesalesmantoanother.Itisthoughtthatthiswillpreventcustomersfromleavingthecarlot.Thetheoryisthatthecustomermightjusthavebadchemistrywiththefirstsalesmanandhemightlikethenextsalesman.
UnderbodyProtection
Acoatingoftheunderbodyofavehicle,usuallywithorganiccoatingmaterials(plastic,wax,bitumenbasedproducts),toprotectitfrommechanicaldamageandcorrosion.
Up
Referstoacustomerwhowalksintoadealerlocation.Itcomesfromasystemusedingreetingprospectivecustomers.Thesalespeoplesnamesarelistedandasthetoppersononthelistgreetsaprospectivebuyer,hisorhernameiscrossedoffandthenextsalespersonbecomestheupman.
UpsideDownCarLoan
Wheretheamountofacarloanismorethanthevalueofavehicle.
VariableGross
Variablegrossincludessuchdealershipoperatingexpensesastotalsalescompensation,deliveryexpense,policyexpense,floorplaninterest,andadvertising&promotion.
VIN
TheVehicleIdentificationNumber(VIN)isa17characternumberthatuniquelyidentifiesavehicle.Itcantypicallybefoundonthedashboardonthedriversideofthevehicle,oronthedriversidedoorpost.Itisalsorecordedonthevehicletitle,registration,andinsurancedocuments.
GLOSSARYOFAUTOMOTIVETERMS
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VoiceRecognition
Quiteafewclimatecontrolandothersystemscanrespondtovocalcommands.Thesesystemsareexpandingintonavigationsystemsaswell.
Warranty(alsoseeBasicWarrantyandExtendedWarranty)
Thepromisemadebyboththevehiclemanufacturerandthevehicledealertofixorreplacepartsonanewvehicleifthereisamalfunctionbeforeaspecifictimeordistancehaselapsed.Insomeinstancessomemanufacturersordealersgrantwarrantyevenaftertheexpiryofthedesignatedtimeordistance.Thisiscalled"goodwillwarranty."