Car Lingo 101

I think a lot of confusion arises from terminology that is used often at a dealership. There's words, phrases, and acronyms that are said or written that people working in dealerships use all the time but everyone else doesn't. Some of the time, and that may be putting in mild, dealers use these to there advantage or disadvantage as it often turns out. Here's a short run down of a few and what they mean when you see or hear them.

Difference (often written DIFF) - this is the difference between what you are paying for the vehicle you are purchasing and the vehicle you are trading in. This number does not include your payoff on your current vehicle.

Amount to Finance (ATF) - the total amount your financing on the vehicle. generally includes all fees, but sometimes you may need to verify that it does.

Trade values are some of the biggest areas where misunderstandings occur. Mainly all the dealers fault when they do.

Actual Trade Value (ACV) - this is what your trade is actually worth, hence actual trade value. A lot of dealers like to use trade allowance as wording instead though. This of course means something totally different.

Trade Allowance - an over allowance includes part (or all) of the mark up that is on the vehicle you are purchasing. This will make your trade figure look inflated. So if someone is saying they're allowing you a certain amount it is generally over the ACV of the vehicle your trading in.

Upside down (which everyone pretty much knows that one), hooked, tanked, buried - are all terms meaning someone owes more on their vehicle than it is actually worth. That is actually a very common occurrence now a days. Usually resulting from finance terms or someone trading in a vehicle and having to carry a remaining balance over to the new vehicle they are purchasing. Can also be caused by not putting any money down with the purchase of a new vehicle since vehicle begin depreciating when you drive away in them.

Discount - seems pretty simple but many get it confused with rebate. A discount comes from the dealer discounting the vehicle. Rebates are given by the vehicle manufacturer. Not the same thing.

WAC - with approved credit. You see that mainly in advertising. Usually having to do with an available interest rate that is tied to your credit score.

Did you know that different businesses view different versions of your credit. Two separate businesses (in different industries) could both pull your Equifax and see two totally different numbers and some different information. Lenders look for different information depending on what you are applying for a loan for. I've never seen any drastic difference but they do occur.

Even though this is a small list it should help with communicating better at a dealership. Many times we don't take the time to fully understand what the other person is saying, and that's with everything. We either don't ask what is exactly meant, or if we're the ones doing the talking, we don't make ourselves clear. All aspects of life would benefit from everyone better communicating with each other.