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Understanding the "talk" when purchasing a new or used car can be overwhelming. It is often as if you have gone to a foreign country without a translator. I'll try to provide you with Car Dealership to English dictionary that I hope will be beneficial in your search and ultimate understanding when purchasing your new vehicle.

New: Right off of the showroom floor, although it may have a few miles from previous test drives

Used: Previously owned vehicle.

Demo: Model used by the dealership to show a model lineup to customers, and used by the sales team for daily driving, basically a rolling business card for the model and the dealership. Dealer maintained, and low mileage, they can often be purchased for below retail price.

Dealer invoice price: The price of the vehicle charged to the dealership by the manufacturer.

Base price: The price of a model with standard equipment only.

MSRP: Manufacturers Suggested Retail Price, right on the main sticker after all options are added.

Sticker price: This is the actual cost of the vehicle after all options and destination charges are added by the dealer, it is usually placed right under the MSRP.

Destination Charge: Everybody has to pay for fuel, and the dealership has to pay a fee to the manufacturer for every vehicle that is delivered. And of course that will be passed along to the consumer.

Dealer Holdback: This is an amount that is credited back to the dealer by the manufacturer on a new vehicle and can reduce the actual cost of the car by as much as 3% to the dealership. This is useful knowledge when haggling over price.

Factory incentives: Offers made by the manufacturers to reduce the cost of a vehicle to reduce stock or help clear year end inventory from the lot. Most incentives come in conjunction with lower APR's (annual percentage rates-see below) and longer repayment terms to give the appearance of lower payments.

Factory rebates: CASH MONEY. But you don't get to see it; rebates reduce the purchase price of the new vehicle. Such offerings are made by the manufacturers to help reduce cost and on-lot inventory also. Some offers combined with an incentive make it the perfect time to get into a new car. They can offer substantial savings, especially if you still owe money on your trade in.

Trade In: The vehicle you are driving now, if it is to be used towards the purchase price of your new vehicle. Most dealerships use The Kelley Blue Book to find the value of your car. Smart shoppers will check that information on-line and

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