Base Price
The cost of a car without options.

Body Type
The distinguishing characteristics of a car, such as the number of doors, windows, way it carries cargo (hatchback, sedan, fastback, sport, etc.)

Buyer's Market
An economic market where conditions are in favor of the buyer.

Dealer holdback
Allowance auto manufacturers give dealers that are worth about two to three percent of an automobile’s Manufacturer's Suggested Retail Price (MSRP). This holdback allows a dealer to pay the automaker an amount less than the invoice and allows the dealer to record a profit by suggesting he paid invoice price for the auto when, in reality, he/she paid less.

Dealer Incentive
A special payment from the manufacturer to the dealer to help the dealer sell slow-selling models.

Depreciation
The decline in the value of an asset due to normal wear and tear. In an automobile, depreciation is based primarily on the number of miles driven—the more miles driven, the greater the depreciation—but may also be influenced by vehicle model, maintenance, general consumer demand for the model and the maker's reputation for quality.

Destination Charge
The fee charged by the manufacturer to ship the automobile to the dealership. This fee is passed on to the buyer, and is included on the sticker.

Fair Market Value
The amount that a consumer is willing to pay for a vehicle.

Franchised Dealer
A company that is authorized by an automobile manufacturer to sell that manufacturer's products. Independent used car lots, automobile brokers, and leasing companies are not franchise dealerships. A franchise dealership normally has an affiliation with the manufacturer included in its name.

Guaranteed Automobile Protection (GAP)
Coverage that pays any remaining balance owed on a loan after payment of a total-loss insurance claim.

Independent Dealer
Independent used car lots, automobile brokers, and leasing companies who are not franchise dealerships. An independent dealership typically does not have an affiliation with an automobile manufacturer.

Invoice Price
The manufacturer's initial charge to the dealer, always including freight (destination or delivery) charges. The invoice price may not reflect the dealer's final cost due to rebates, allowances, discounts, and incentive awards the dealer may receive.

Manufacturer's Suggested Retail Price (MSRP)
The vehicle sale price which appears on a label affixed to the car window showing the base price, manufacturer's installed options, the manufacturer's suggested retail price, plus manufacturer's freight or transportation charge, and fuel economy (mileage). The label is required by federal law and may not be removed by anyone other than the purchaser. The MSRP is the recommended selling price for a vehicle plus any optional accessories.

Manufacturer's Rebate
A program offered directly to buyers by auto manufacturers to increase sales or reduce excess inventories.

Mark-up
The difference between the invoice price and the price for which the dealer sells the car.

Optional Equipment
Equipment not included in a vehicle's base price. Depending on the vehicle, optional equipment may include such items as air conditioning, automatic transmission, passenger-side air bags, or high-quality sound systems.

Pink Slip
An automobile's title certificate.

Rebate
A special payment from the manufacturer to the customer to reduce excess inventories. Also called a "Customer Incentive."

Retail Book Value
The approximate value of a used car if sold privately or by a dealership. Retail car prices are based on the accepted price of the sellers. A publication of Canadian Black Book, is one of several standard references used to determine the value of used vehicles. The value is sometimes called the "Blue Book Value." Blue books typically show a wholesale value and a retail value for each vehicle.

Residual value
The remaining dollar value of a leased auto at the end of the lease term. Also known as book value.

Sticker Price
The manufacturer's suggested retail price for a vehicle. Also called "List Price" or "MSRP."

Vehicle Identication Number (VIN)
A seventeen-character code that uniquely identifies each vehicle manufactured in the world. A vehicle's VIN can usually be found mounted on the dashboard of the driver's side, visible through the windshield, or stamped on the vehicle's firewall.

Wholesale Blue Book Value
The approximate price that a dealership will pay to purchase a used vehicle. A publication of Canadian Black Book is one of a few standard references used to determine the value of used vehicles. The value is sometimes called the "Blue Book Value." Blue books typically show a wholesale value and a retail value for each vehicle.

Wear and tear
The normal damage done to a vehicle over its lifetime.

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