Every career field in the world has their own particular set of lingo that makes it difficult for laymen to understand the details of exchanges between co-workers. Truth be told, we do it on purpose. We want to keep some things under our hats in hopes that outsiders are unable to figure out our code. However, in nearly every walk of life, this form of lingo exists. Perhaps this craft wide language revolves around creating a sort of familial feeling or comradery amongst co-workers, or perhaps it exists solely to keep the customer in the dark.
Whatever the reason for the creation of our own personal lingo, it is no more evident anywhere as it is in the car business. With a veritable dictionary rife with terms that only those in the auto business would understand, it’s no surprise that our customers can’t understand half of what we’re saying. In this case, the lingo isn’t meant to confuse or mislead future car buyers, it’s a way to keep some things to ourselves so as not to offend or cause problems, in some instances. Sometimes, it’s just a way to keep things moving as quickly as possible, by not having to draw out the entire lengthy production of words.
There are some cases where the lingo will be dealer specific, that is, related to one particular dealership, but most of the times the vernacular is across the board. While the talk is far from offensive or misleading, as a car buyer, we want to be in the know, on every level. Here are some helpful hints
- ACV – While it may seem like there are too many acronyms in the auto business, this one is very common. It means actual cash value, as in what your car is really worth.
- LTV – Another popular acronym, this one means loan-to-value, which means the amount of the loan in relation to the value of the car. Usually presented as a percentage rate, this is essentially how much of the car you’re financing.
- RO – An RO is a repair order, as in an order placed with the shop to have something repaired on your vehicle.
- F&I – If you’ve bought or are buying a brand new car, you will probably have heard this term. F&I stands for Finance and Insurance, or where the deal goes down. The people in this part of the dealership are the people that are chatting up the banks to get you out the door in your new car.
- DTI – One of the terms you may hear the F&I person throw out is DTI, and it means debt to income. It is usually a percentage that shows how much money you make on a monthly basis versus how much of that money you’re paying out for debt.
- Variable Operations – This is part of the dealership, meaning the sales department.
- Fixed Operations – This is the service and parts department of a dealership. Fixed and Variable work in combination to support the dealerships bottom line.
- VSC – This means vehicle service contract. This is something that can be purchased during the course of the sale to cover costs of potential repairs, oil changes, and so forth.
- GAP Insurance – Guaranteed Asset Protection coverage is also an added purchase, and this covers you in case you total your new vehicle, and still have a lot to pay on it. GAP will cover the difference between what you owe on your vehicle and what it is worth at the time of the loss.
- Residual Value – If you’re a current lessee or you’ve leased a car in the past, this one is probably pretty familiar. It means what the car will be worth at the end of the lease.
- CPO – CPO means certified pre-owned vehicle. This is a vehicle like a Used SUV, sedan, or truck that has been put through a rigorous inspection upon receipt. It is checked out on many different levels and is then certified by the dealership which acts as an extra assurance for potential buyers.
The aforementioned terms are just some of the terms you may hear just sitting around the dealership waiting for financing or for paperwork. There’s a plethora of others, but this is all the professional terminology and its meaning. Helping customers to understand the process can only assist in our explanations, and thus, simplify the process. Stay tuned to finally figure out what all that slang speak means that maybe you aren’t supposed to hear.