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Technically Speaking--Dealerspeak: What You Kneed To Know

By: Jayne O'Donnell

The new '96 models are now fully stocked in dealerships. And for those who are planning on shopping the showroom floors, it's time to learn how to talk the talk of the car dealers with whom you'll be interacting. Following is a look at some of the "dealerspeak" that's apt to be spoken with or around you by the salesperson. Many of the terms come courtesy of Kurt Allen Weiss, a former car salesman and author of "Have I Got a Deal For You", (Career Press, Franklin Lakes, N.J.).

ALLOWANCE:

An inflated value for a trade-in vehicle. Dealers will sometimes wrap a discount for a new car into the amount they quote for a buyer's trade-in. This is the opposite of A.C.V., or the actual cash value a dealer considers a trade-in to be worth.

BIRD DOG:

Someone who sends business to a dealership. That person sometimes receives money (called a "bird dog fee") for doing so.

BURIED:

When you owe more on your trade-in than it's worth. This can happen when a salesperson makes so much profit on a vehicle that it's hard for the customer to sell it until it's completely paid for. This sometimes is referred to as "upside down" or "negative equity."

CLOSER:

This is the person brought in to wrap up, or close, the deal with a buyer. Usually it's someone described as "the manager," although it also simply may be another salesperson.

DEALER HOLDBACK:

An amount of money retained by the manufacturer. It's a sum of profit, usually between $300 and $700 per car, built into the window sticker and designed to give the dealer more room to negotiate the price. Holdback is the reason dealers can afford to sell cars only slightly above the dealer invoice--there's actually an additional profit being held in the event the car is sold.

DEALER MARKUP:

The sum of money the dealer asks above the Manufacturer's Suggested Retail Price (MSRP, see below), usually shown on a sticker located next to the MSRP window sticker.

F & I:

While they may appear to be salaried clerks, employees of the Finance & Insurance office frequently are people paid on commission for selling you dealer add-ons, extended warranties, longer-term loans or giving you less money for a trade-in. Beware.

LOCATES:

Often if a dealer doesn't have a vehicle in stock that a customer wants, he'll find one at another dealer. These vehicles are called "locates."

LOW-BALL:

A salesperson may sometimes quote a price that's lower than he actually intends to pay, if it relates to a figure that can be changed.

MANUFACTURER'S SUGGESTED RETAIL PRICE:

The printed price the manufacturer suggests the dealer should charge for a vehicle. It lists all standard and optional equipment installed on the vehicle before it was received by the dealership. Federal law requires it be affixed to a window on a car, but this isn't required on a truck or van. It's also called "MSRP" or "window sticker."

MONRONEY:

A nickname for the MSRP named after former Congressman Monroney, who introduced legislation to have the MSRP posted on cars.

OVER THE CURB:

Once the car has been formally purchased by a consumer and is driven off the lot, or "over the curb," it becomes the legal possession of the buyer. That's also when most of your rights to change your mind are forfeited.

PACKING/PACKING IN:

Profits or profitable products, such as insurance, are often added to a deal or to the product without the customer's knowledge. This is referred to in the business as a dealer "packing" profit into the deal.

PENCILED:

Sales managers will often "pencil" a customer's offer with a red pen or marker, which is a rejection of the offer. The salesperson then has to go back to the customer to up the ante.

RECOURSE:

If a dealer has an arrangement with its sources of financing that leaves him responsible for a customer's auto loans, he has "recourse." This type of dealer has more leeway to make credit approval decisions on his own, giving customers a better chance of getting the loan they want. Conversely, "non-recourse" means the dealer simply supplies the background information on the applicant and then relies solely on the loan applications the lender makes.

Also see: Technically Speaking---Take A Break, by Jayne O'Donnell