Glossary Auto Terms

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.

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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.



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.



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)



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.



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.



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.



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.



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.



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.



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)



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.



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).



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.



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.



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.



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.



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.



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.



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.



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.



VoiceRecognition

Quiteafewclimatecontrolandothersystemscanrespondtovocalcommands.Thesesystemsareexpandingintonavigationsystemsaswell.

Warranty(alsoseeBasicWarrantyandExtendedWarranty)

Thepromisemadebyboththevehiclemanufacturerandthevehicledealertofixorreplacepartsonanewvehicleifthereisamalfunctionbeforeaspecifictimeordistancehaselapsed.Insomeinstancessomemanufacturersordealersgrantwarrantyevenaftertheexpiryofthedesignatedtimeordistance.Thisiscalled"goodwillwarranty."

Documents

Glossary Auto Terms