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| Term | Definition |
| APR | Annual Percentage Rate - Interest rate for borrowing money |
| Bait And Switch | A deceptive way of selling that involves advertising a product at a very low price in order to attract customers who are then persuaded to switch to a more expensive product |
| Car Title | A legal document that establishes ownership of the vehicle |
| Collision Insurance Coverage | A type of auto insurance coverage. This will reimburse the insured for any damage sustained to their personal automobile that is due to the fault of the insured driver. This type of insurance is often added as an extension of a basic policy. |
| Comprehensive Insurance Coverage | Protects you against damages to your car that are the result of covered perils not related to a collision. Think of a scenario that could cause damage to your car that has nothing to do with striking another vehicle. |
| Credit Score | A calculation of credit worthiness based on credit history, amount of money owed, and your repayment history |
| Dealer Add-Ons | High-priced, high-profit services that a dealer may offer like cleaning the car or checking the oil and tire pressure that raises the price of the car. |
| Dealer Invoice (Price) | Amount the automaker charges the dealership for new vehicles at the time the dealer buys them; it does not reflect some discounts that the dealer gets. |
| Delivered Price | The "out-the-door" price, it is the total of the purchase price, sales tax, registration, other charges, minus any rebates |
| Depreciation | Decrease in value of an asset due to obsolescence or use |
| Destination Charges | A fee added to the price of a new car to cover the cost of shipping the vehicle from the manufacturer to the dealer |
| Financing | Borrowing money for a car, typically the period last for 36,48, or 60 months. |
| FTC Rule | Requires dealers to fully disclose to buyers what is/is not covered under the warranty for a used vehicle |
| High-Balling | Unrealistically high price that a dealer will offer for your trade in which they will change at the last minute, after you have agreed to buy a car. |
| Invoice | A paper describing a purchase and the amount due containing all items included with the vehicle |
| Kelley Blue Book | Publication used by car buyers to locate information about a car |
| Leasing | Acquiring use of an asset by 'renting' rather than by purchasing. The individual renting the asset must make scheduled payments and has the vehicle for a specific amount of time. There may be a limit on mileage and other rules may apply |
| Lemon | A car with substantial defects that a manufacturer is unable to fix after repeated attempts. |
| Lemon Laws | American state laws that provide a remedy for purchasers of cars and other consumer goods[1] in order to compensate for products that repeatedly fail to meet standards of quality and performance |
| Liability | A part of the general insurance system of risk financing to protect the purchaser (the "insured") from the risks of liabilities imposed by lawsuits and similar claims. It protects the insured in the event he or she is sued for claims that come within the coverage of the insurance policy. |
| Low-Balling | Unrealistically low price that a dealer may offer to keep the trade-in value low. |
| Manufacturer's Suggested Retail Price (Msrp) | MSRP, or sticker price, this is the price printed on a sticker pasted on the window of a new car |
| Miles Per Gallon (Mpg) | A rating of car's fuel efficiency that indicates how many miles the car can drive using 1 gallon of gasoline |
| Negative Equity | Occurs when the value of an asset securing a loan dips below the loan balance. |
| Preapproval | The process of determining how much money a prospective buyer will be eligible to borrow prior to application for a loan. A preapproval includes a preliminary screening of a borrower's credit history. |
| Rebate | Discounts given by the manufacturer (usually) |
| Registration | Document and fee that includes who the main operator of the vehicle is. |
| Sticker Price | Total price of a vehicle,including base price, options, and detination charge; this is the price shown on the tag in the car's window. Also known as MSRP |
| Title | Legal document that establishes ownership, lists the legal owner (lending institution) and the registered owner (you) |
| Total Cost Of Ownership | Sum of costs incurred to purchase, operate and maintain a vehicle |
| Trade-In Value | What you get from a car dealer when you're buying another car |
| Upside-Down Loan (Underwater) | Owing more on a loan than the car(or other collateral) is worth. |
| Vehicle Identification Number (VIN) | An alphanumeric number that identifies the history of each vehicle manufactured or sold in the United States. Located on multiple spots throughout the vehicle and on the sale documents |
| Warranty | A written statement about a product's quality or performance |
