Automotive Dealership Terms Flashcards
OEM (Original Equipment Manufacturer)
Refers to the company that produces the vehicles (Ford, Toyota, GM, etc…)
MSRP (Manufacturers Suggested Retail Price)
The suggested selling price of a vehicle as set by the manufacturer
Invoice Price
The amount the dealer pays to the manufacturer for each vehicle. Often the starting point for negotiations.
Dealer Holdback
A percentage of the vehicles invoice price that is returned to the dealer after the car is sold, providing additional profit.
Floor Plan Financing
A loan that allows dealership to finance their inventory of vehicles.
F&I (Finance and Insurance)
The department responsible for arranging financing and selling insurance products.
Lease
An agreement in which the customer pays to use a vehicle for a specific period without ownership often with mileage restrictions.
Trade - In
The vehicle a customer brings to the dealership as part of the transaction when purchasing a new one
Upside Down (Negative Equity)
When a customer owes more on their trade in than its current market value.
APR (Annual Percentage Rate)
The annualized interest rate charged for borrowing, including any fees or additional costs
Extended Warranty
Additional coverage beyond the manufacturers warranty, offering protection against certain repairs.
Inventory Turnover
The number of times a dealership sells and replaces its inventory in a given time period.
CSI (Customer Satisfaction Index)
A measurement of customer satisfaction based on their experiences with the dealership.
BDC (business development center)
A department focused on generating and managing customer leads.
RO (Repair Order)
A document detailing services or repairs performed on a vehicle in the service department
