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Car Glossary ›› Car Buying Glossary

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Word Definition
Backup Camera A backup camera is a device which can allow the driver to view the area behind the vehicle while in reverse. A tiny camera is mounted on the rear of the vehicle, and the image is displayed on a monitor located on the dashboard.
Traction Control A computerized technology that improves the vehicle's stability by controlling body roll during hard maneuvering and heavy skids or slides.
Electronic Stability Control A computerized technology that improves the vehicle's stability by controlling skids and slides through application of the brakes, controlled by the vehicle's computer. It is a driver-assist technology.
Maintenance Contract/Service Contract A contract agreed upon at purchase that provides vehicle maintenance over a predetermined amount of time or mileage. Service contracts are all different and should be read carefully before purchased.
Holdback A credit the dealer receives from the manufacturer for selling a vehicle. This helps dealer profitability and usually consists of 2-3% of the total MSRP. Not all manufacturers provide holdbacks.
Inception (Acquisition) Fee A fee charged by the leasing company for filling out and processing paperwork. This fees is sometimes negotiable.
Early Termination Fee A fee that is charged if a lease is terminated before its agreed-upon date.
Lease A fixed, long-term contract in which a consumer uses a vehicle which he/she does not own for a set period of time at a certain price, similar to renting.
Payment Protection Plan A form of insurance that protects the borrower in the event the borrower cannot make the payments due to financial hardship or unexpected circumstances.
Engine Block Heater A heater that warms the vehicle's engine block faster, allowing the vehicle to reach operating temperature sooner. This improves the vehicle's fuel efficiency and ability to heat the cabin faster. An engine block heater is extremely common on diesel vehicles.
Excessive Wear Charge A lease term that describes any excessive wear and tear on a vehicle during its lease period. It can include body damage, scratches, upholstery damage, stains, or cracked glass.
Purchase Option A lease term that describes the consumer's right to purchase the vehicle at the end of a lease term, at a stated price.
Subsidized Lease A lease where the manufacturer chooses to absorb a portion of the cost as an incentive to the purchaser.
Credit Life Insurance A life insurance policy, which can be purchased at the time of sale, that will pay off the remainder of the vehicle loan should the borrower die unexpectedly.
Option Code All options on a vehicle have codes that help dealers make up option packages. Option codes may be listed on the spec sheet.
Alloy Rims Alloy rims are the traditional alternative to steel rims. They are made from an alloy of aluminum or magnesium, and are typically silver/gray in color.
Alternative Fuel Alternative fuel vehicles are vehicles which run on resources other than standard gasoline. This can include hybrid, diesel, hydrogen-powered, and ethanol vehicles.
F&I An acronym for Finance & Insurance. Each dealership usually carries an F&I person to handle all of the paperwork needed in a vehicle purchase. This person may assist the buyer with insurance, financing, rebates, and price adjustments.
LED An acronym for Light-Emitting Diode, it describes a particular type of light bulb being used on vehicles. LEDs are more efficient and last longer than traditional bulbs.
NADA An acronym for National Automobile Dealers Association. The NADA sets vehicle values similar to Kelley Blue Book.
 
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