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HOME PREPARATION TRADE-IN SKILLS AT THE DEALERSHIP RESOURCES TERMINOLOGY
Don't Get Fleeced Learn The Smart Way to Purchase a Car!
fleece [flees] verb: to deceive and take money from (someone)
The problem, the majority of customers go into a dealership without any knowledge of what vehicle is right for their wants and needs, their current vehicles trade in value, the fair market value of the vehicle that they are interested in purchasing, how a dealership hides profit, and many other skills needed in making a fair purchase of a vehicle of their selection. They ultimately get fleeced. This website will help you to become a more knowledgeable purchaser.
First, a little about me. I'm a retired US Marine. I've personally owned in excess of one-hundred-twenty vehicles over the past 15 years, you could say that I have more than a small interest in the automobile industry. I've worked in the auto industry as a New car salesperson for Dodge and Mitsubishi Motors where I became certified in less than two months time where it usually takes a minimum of six months to accomplish. I was able to obtain and keep a national CSI, Consumer Satisfactory Index, score of a minimum of 96% throughout my career in new car sales, I moved on from there to used car sales and then onto automobile wholesale, then eventually opening a used car dealership with a partner. I firmly believe that the "customer" is king/queen in any business. The content is this module is based upon personal experience and provides an inside look of the back-end dealings of a typical dealership. This module is part of my Masters project in Learning Design and TECHnology at the University of Hawaii Manoa. This website is not affiliated with any financial institution or dealership as it is meant to be a educational tool for the wary buyer.
Please take the brief survey below, don't worry their is no personal information being collected or saved. Once you complete that I would ask that you please take the pre-test so I can see where you are starting at and at the end I'll ask that you complete the post test so I may evaluate how much improvement was made through the completion of this module. There will also be embedded questions throughout the module. .
http://fleeced.weebly.com/[4/22/2016 6:00:12 PM] Preparation - Don't get fleeced!
HOME PREPARATION TRADE-IN SKILLS AT THE DEALERSHIP RESOURCES TERMINOLOGY
Purchasing a automobile can be quit a daunting and sometimes even a exciting process, next to purchasing a home, it is typically the second largest purchase a person makes in their life, so attempting to keep up with your neighbors when they buy a new or new -used car would not be the smartest thing to do. The only times that you should look to purchasing a new, new- used car would be when your family situation has or will be changing, for example you might be expecting and addition to your family, or your current vehicle is over eight years old or is breaking down and in need of constant repairs, becoming a money pit or more seriously becoming dangerous. When one of these occasions arise then one should do their research before purchasing either one.
What can you afford? Establishing a reasonable budget is critical. The money you have available for a down payment, of which 20% would be optimal, and your potential, budget, for making monthly installments on a loan will determine your car choices.
As a driver, you are probably budgeting for college, a home or other pursuits, so it is important to work with your family to set a realistic target. In doing so, consider whether this is a car just to see you through the next couple of years or whether it will be your traveling companion through 5 years or more. That distinction will determine how new and reliable the car must be.
No question, the best way to save money is to buy used, or new-used as its called nowadays. By purchasing used, you can buy more car, meaning you could afford, say, a mid-sized sedan rather than a tiny econ-o-box. A new car loses almost half its value in the first five years, on average but still has more than half its useful life left. Letting someone else take the depreciation hit is a smart bet. But try to buy the newest car you can, in order to get the most up-to-date safety features. And
If you are a new buyer, financing will be a challenge. Lenders are typically looking for adults with a good credit score, 660 and up, steady employment history, and financial assets, such as a five-figure bank account or a house. So if you're not already established, then in most cases, that will mean a parent or other family member will have to act as a co-signer or even take the loan in their own name.
Federal law requires that a individual has the right to see, review their personal credit ratings annually at no charge, you can go to http://www.consumer.ftc.gov/articles/0155-free-credit-reports for more information and a link to the reporting services to receive your report, you may also dispute any of the information if it is incorrect whereas if it is shown to be incorrect then the reporting agencies must update your reports with the corrections at no charge. A loan is a business agreement based on a lender charging interest for you to borrow money. This is a place where a dealership can make a tidy profit without the consumer ever realizing it. So if you know that you will be financing the purchase its best to go ahead and get a per-approval from your bank, even better from a credit union as they typically have the lowest interest rates. Please note than most credit unions and banks will finance a used car at new interest rates if the car is three model years or newer. Please take notice if the manufacturer is offering 0%, there will be qualifiers though, such as losing rebates or non-negotiable pricing, etc. Remember nothing is free! The lower the interest rate and shorter the loan period, try to keep the term to no longer than 36 months, the less extra you pay in finance charges. Most dealers and banks want you to go 60 months or greater, or even better yet, ten years, as this is their bread and butter when it comes to their most profitable customers. Of special note, watch out for the mom and pop pay it here lots, as they can charge up to 28% interest, where the avg is around 7%, and they don't have to, and most times do not, report to the credit reporting agencies, unless you don't pay them.
So, if you are a new buyer and have little to no credit, then the best solution may be to borrow from a family member, repaying them a fair interest rate that they would have seen from their savings account. That would save paperwork, keep the money in the family, and hopefully allow payment flexibility.
Do not run your credit unless you are very serious about an upcoming major purchase. If you wait and run your credit at the
http://fleeced.weebly.com/preparation.html[4/22/2016 6:13:33 PM] Preparation - Don't get fleeced!
dealership or bank, then it will affect your score each time it has been ran. In other words, do not rush into a dealership and run your credit, this is what many salespersons will attempt, they want to run your credit and check if you have a trade that they can steal. Simply bring the copy of your report that you received for free, this should suffice enough until you are satisfied enough to complete the deal, then let them run your report. To save time and also to insure that you look like you know what your doing then you'll need to take the following items in with you:
POI or better known as Proof of Income, bring two 2 three months current pay stubs POR or better know as Proof of Residence, bring two forms such as; bank statement, electric/water/gas/cable bill, or telephone bill and they must have your name and current physical address on them References: Ten names with current addresses and telephone numbers of friends and family They're already thinking about how much that they can gross, make before you've had a chance to selecting a vehicle.
Do your homework. Now that you have a budget in mind, now comes the fun part: creating a short list of target vehicles. Focus on practical choices—cars that will minimize ownership costs and suit your needs for the next few years. To right-size your costs, resist the temptation to target sporty, luxury, or large vehicles. They can be costly to maintain and insure, and tend not to get good fuel mileage. The last thing you want is to raid your savings to cover car costs. Instead, look to small sedans and hatchbacks from mainstream brands, or even better, mid-sized sedans. Here's a brief list of vehicle types with their most practical use;
Coupe/Sports Coupe - 2 door vehicle typically used by single or couples because access to rear seat not important Sedan/Sports Sedan - 4 door vehicle typically used by families of three or more Mini Van - 4 door vehicle used my families of four or more Full size Van - Used by families with older children Compact - Mid-size SUV - Sports Utility Vehicle - used by families of four or less, singles and couples Full size SUV - used by families of five and up to eight Trucks - generally used by everyone, but not normally as a primary family vehicle
Often times it can be tempting to lust after a high-horsepower car or one with the latest-and-greatest high-tech features, but be practical. Money may be made from trees, but it sure doesn’t grow on them.
To reduce the risk of purchasing a trouble-prone vehicle, identify models with a good reliability record before you begin shopping. Consumer Reports collects data on more than a million cars a year to present reliability information covering the past decade. Such data can point you to cars that have been shown to hold up well over time. Reliability is a key factor, as it speaks to potential costs and inconvenience. At a minimum have the dealership run a CarFax.com on the vehicle that you're interested in. Also note that more often than not the CarFax does not have everything listed that might had happened to the vehicle such as if it was in an accident and it was not reported to the insurance or police department then it will not be disclosed on the report.
Read online reviews of the cars you’re considering from both automobile publications and owner forums. Balance the different perspectives against your preferences, and use the feedback to highlight aspects that warrant closer attention. For instance, complaints about the seat comfort or ride quality can be evaluated on a test drive. Your opinions may differ from those held by others. And ultimately, it is you who will live with the car.
Preparation Refresher
-This quiz should take about 5 minutes. -Please answer all questions with the best answer
* Required
Please enter your your first name and last name initial. * ex. Rickey Shankles would be entered as rickeys
A USED vehicle can be financed using NEW vehicle interest rates as long as it falls within a maximum of ___
http://fleeced.weebly.com/preparation.html[4/22/2016 6:13:33 PM] Trade-In Skills - Don't get fleeced!
HOME PREPARATION TRADE-IN SKILLS AT THE DEALERSHIP RESOURCES TERMINOLOGY
So, you've decided to have a car trade-in. You know selling your car yourself will net you the best deal, the one-stop shopping convenience of buying a new car and trading in the old at the dealership seems to be the quickest way to get everything done at once, basically less hassle for you. The trouble is, dealers have experience on their side, they strive to do what is known as "steal the trade", and extracting the best deal out of the dealership takes research. Below are the best ways to navigate a car trade-in:
1. Retail to Retail or Wholesale to Wholesale? 99.999% of the time the dealership will want to take your trade-in for less than wholesale pricing and of course they will want to sale you their vehicle at full retail pricing. So to cut through the chase, simply tell them that you want a fair deal and to that, they will need to offer you wholesale to wholesale or retail to retail. 2. What's your cars value? Do yourself a favor! Research your current vehicles realistic value prior to going to the dealership as it will help prepare you for initial shock of what your "prized" vehicle is worth to the dealership and it will give you a good idea of what you should expect for your trade-in. Every time, I do the following:
1. Go to Kelly Blue Book, www.KBB.com, 2. Select my vehicle by year, brand and model 3. enter my mileage by rounding up to the next thousand miles 4. choosing the style that most closest matches my vehicle 5. I do not add any options 6. choose trade in to a dealer 7. choose good for my vehicles condition, even if its excellent 8. I print this valuation off so I will know the lowest value of my car 9. Next I would go back and 10. add all the options that my vehicle has 11. choose trade in to a dealer 12. choose the actual condition of my vehicle 13. I print this valuation off so I will know the realistic value of my car 14. I would also look for local retail prices of vehicles similar to mine and print these off as well 15. You might also perform the same steps at www.NADAguides.com as they provide all the values from rough trade to clean retail on one page. 3. Clean up the vehicle. Would you buy a filthy car? Good News! The dealership will be more than happy to buy your filthy car, at much less than wholesale pricing. This will only cost you about $1,000, no problem right? Do yourself a favor and take your vehicle to the local car wash and spend the extra money to get the delux car wash as this will ultimately save you hundreds of dollars, worst case is at least you'll be driving around in a nice and clean vehicle. Who knows, you may want to just keep your current vehicle. Also, please note that you will want to remove any stickers or items that don't belong to the original vehicle, especially those racing and or performance stickers. 4. Is your vehicle paid off? That's the first thing a dealership wants to know about your vehicle. If it's not paid off, you should call your finance company and obtain a ten day pay-off just so you know how much it is as some dealerships will over inflate this number to increase their bottom line profit. Most will ask for a thirty day payoff and they will actually pay it off in two to three days instead. 5. Did the dealership really misplace your keys, registration or drivers license? Most likely not! Chances are that they are simply choosing to misplace them to keep you at the dealership. I've seen some really bad managers and salespersons throw the customers keys on the roof of the building roof because the customer was or is particularly hard to take advantage of or the customer just doesn't know better and the sales team know this. I've personally had my
http://fleeced.weebly.com/trade-in-skills.html[4/22/2016 6:17:22 PM] Trade-In Skills - Don't get fleeced!
vehicles registration "accidentally" shredded. You can avoid most of this game playing by simply showing them your registration or bringing in a copy for them, and also by letting them use your spare key and only the spare key itself.
Don't Get Fleeced - Trade In
-This quiz should take about 1 minute. -Please answer all questions with the best answer -You are ready to continue on to the Online Learning Module
* Required
Please enter your your first name and last name initial. * ex. Rickey Shankles would be entered as rickeys
How should I check my cars minimal fair market value for possible sale or trade-in? * A. Access http://KBB.com or http://NADA.com for “TRADE-IN” value for lowest price B. Ask my neighbor C. Take it to a auto dealership D. Make a guess
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http://fleeced.weebly.com/trade-in-skills.html[4/22/2016 6:17:22 PM] At the Dealership - Don't get fleeced!
HOME PREPARATION TRADE-IN SKILLS AT THE DEALERSHIP RESOURCES TERMINOLOGY
Owning a car brings fabulous freedom but also tremendous responsibility. Be ready for significant expenses beyond the purchase price: You’re also on the hook for, fuel, maintenance, repairs, insurance, and taxes. Here we lay out some strategies for getting behind the wheel as painlessly as possible.
Important: Once you have completed this page, I would ask that you please take the post-test so I may evaluate how much improvement was made through the completion of this module. I would also ask that you please take the feedback survey below, don't worry their is no personal information being collected or saved.
Inspect and Test Drive -- New cars are presumed to be consistent performers. (For example, each new Honda Civic is expected to drive like any other.) A casual inspection can confirm the car is truly in “new” condition. However, with a used car, every example has led a different life. Some may have been pampered, others abused, potentially by a teenager! The best used cars tend to be owned by a trusted friend or family member who can share details of the car’s history.
When shopping used, try to bring a car-savvy person along . Carefully look the car over inside and out, top to bottom. New or used, always inspect during daylight hours when paint flaws that may indicate repairs or other troubles can be readily spotted. Essentially, you’re looking to ensure the car is in the condition claimed by the seller.
For used cars, the real trick is having the car inspected by a professional mechanic. They will usually charge for the service, but it can be money very well spent.
Negotiate like a pro -- If the car looks good, then it's time to talk numbers. When negotiating a car purchase, it is essential to have another experienced adult to assist. A professional car salesperson knows all sorts of ways to push people into buying just about anything for the highest possible price. That is, after all, their job. As charming as salespeople can be, remember that they aren’t really your friend, you are merely just a paycheck. Most car shoppers are outmatched during that phase of car buying.
If you’re buying from a private seller, negotiation is more straightforward. Research online what the current wholesale price is for the car based on its condition, mileage, and location—that is your target. Closer the better, and bonus points are awarded for getting an even better deal.
A used-car lot or dealership will focus on the retail price, again easily found online.Chances are, they bought the car for much less, up to $3,000 to $6,000 less, taking it as a trade-in or picking it up at a wholesale auction. They need to make a profit, of course, but your attitude should be that their most profitable deal of the day isn’t going to come out of your skin. The goal remains to get as close to the wholesale price as feasible, though in reality, you’ll probably end up in between the two figures.
If financing, pre-arrange a loan so that you know what the interest rate and loan term will be. If the dealership can beat what you arranged for yourself, great. If not, then you’re still covered. You can use an online calculator to figure out what your payments would be, based on the expected purchase price and down payment.
The salesperson will probably focus on monthly payments, as that enables them to sneak in added profit by stretching out the term of the loan. Monthly payments may look enticingly low but you’ll be paying those for a long, long time. When comparing one loan deal with another, add up the total of all the monthly payments. Because you did your homework, you can focus on the total amount, rather than just the monthly payments.
Negotiate one element of the deal at a time, establishing the purchase price, then moving on to discussing financing, if interested. Don’t be talked into extras, such as rust-proofing, fabric protector, or even an extended warranty. They aren’t necessary. You’re smarter than that, as proven by the effort put in to find a good, safe, reliable car.
http://fleeced.weebly.com/at-the-dealership.html[4/22/2016 6:18:23 PM] At the Dealership - Don't get fleeced!
If the seller won’t meet what you would consider a fair price, walk away. Every year, something like 40 million used cars change hands. Rest assured, there are plenty of other cars out there from which to choose. Getting a good deal on the right car can take a lot of patience and persistence but the reward—freedom and mobility—is worth the effort.
Must-have safety features -- Whether buying new or used, these are the features you want: Antilock brake system (ABS): Readily available, antilock brakes prevent the wheels from stopping completely during hard braking. Because the wheels do not lock up, even during emergency braking on slippery surfaces, they enable the driver to retain steering control. Electronic stability control (ESC): This feature prevents a car from sliding sideways, such as when going through a turn a bit too fast for the conditions. ESC can be especially welcome in bad weather. All new passenger now have ESC and have for several years. On older cars, ESC may have been optional. Make sure the specific used car you’re buying has it. Head-protecting side airbags: Side and side-curtain airbags have been shown to provide real protection in a side impact, such as when T-boned by another car crossing an intersection.
Don't Get Fleeced - Post Test
-This quiz should take about 20 minutes. -Please answer all questions with the best answer -You are ready to continue on to the Online Learning Module
* Required
Please enter your your first name and last name initial. * ex. Rickey Shankles would be entered as rickeys
Which of the following scenerios are considered to be a good time to purchase a car? * A. Before your current vehicle breaks down B. Your current vehicle is over eight years old C. To keep up with your neighbor D. Family situation has changed
Of the following, which would be the best choice for checking your credit score? * A. Your bank B. The dealership C. Your parents D. Visit http://www.consumer.ftc.gov/articles/0155-free-credit-reports
How should I check my cars minimal fair market value for possible sale or trade-in? *
http://fleeced.weebly.com/at-the-dealership.html[4/22/2016 6:18:23 PM] Resources - Don't get fleeced!
HOME PREPARATION TRADE-IN SKILLS AT THE DEALERSHIP RESOURCES TERMINOLOGY
Besides a home, an automobile is often the most expensive purchase a consumer ever makes—so, for obvious reasons, you don’t want to screw it up. To ensure you wind up with the right car at the best possible price, here’s a list of helpful and informative resources of use to first-time buyers and experienced negotiators alike.
For your convenience, each link below opens a new browser window or tab.
Research
Edmunds First-Time New-Car Buyer Guide. There’s probably no place better for first-time buyers to start the search than here. The experts at Edmunds break down the car-buying purchase into nine different sections, starting with “Choose Your Car,” on through “Get Pricing Information,” and eventually ending with “Close the Deal.” Each section is divided into three or more detailed mini-guides, rife with nitty-gritty on everything from custom-ordering a new vehicle to making the most of a test drive. The info and advice is comprehensive, bordering on overwhelming—in which case it’s worthwhile checking out a boiled-down list of car-buying tips. KBB’s 10 Tips for First-Time Car Buyers. This guide to making smart car-buying decisions can be read in minutes, and it’s filled with practical advice and handy rule-of-thumbs such as:
If you’re financing, figure $25/month for every thousand dollars that you borrow for 48 months, and $20/month on 60-month financing. It follows that every $10K borrowed is $250/month for four years, and $200/month for five. Again, this is the base obligation; insurance, fuel and periodic maintenance are above and beyond this.
Current Rebates and Incentives Here's the latest up-to-date listing of manufacturer rebates and incentives for your area.
Dealer Holdback Learn the truth about the dealership's "secret" holdback - bonus money they receive from the manufacturer - and how it may affect you.
Dealership Fees What fees should you pay? What about advertising and dealer prep fees? Here are the answers, including a handy state-by-state chart.
Used Car Price Quotes Buying a used car? Save time and hassles by getting price quotes for used cars in your area. This is a free service. No obligation. Financing
MyAutoLoan Submit one quick loan application and get up to four financing offers. Compare the offers and save. Try it even if you've got no credit, bad credit or a bankruptcy.
Auto Loan Calculator Use this handy online tool to calculate your monthly car loan payment.
About Credit Reports Consumer advocate Michael Royce explains credit reports and your legal right to get yours for free. Manufacturers
Acura Audi BMW Buick Cadillac
http://fleeced.weebly.com/resources.html[4/22/2016 6:19:41 PM] Resources - Don't get fleeced!
Chevrolet Chrysler Dodge Ford GMC
Honda Hyundai Jaguar Jeep Kia Land Rover Lexus Lincoln Lotus Mazda
Mercedes Mitsubishi Nissan Porsche Scion Subaru Suzuki Toyota Volkswagen Volvo
News & Reviews
Automobile Magazine Car and Driver Consumer Reports Edmunds Motor Trend Road & Track
Consumer and Safety Info
Consumer Information Center Helpful and informative consumer publications for car buyers. Check out Finding The Best Used Car, a free report you can read online. Sponsored by the U.S. Government.
National Highway Traffic Safety Administration Lots of valuable free car safety information including the helpful Buying a Safer Car publication. Sponsored by the U.S. Government.
The Center For Auto Safety This non-profit organization monitors the latest news and trends in auto safety issues. Features a detailed listing of Lemon Laws for every state. Fuel Economy The official
http://fleeced.weebly.com/resources.html[4/22/2016 6:19:41 PM] Terminology - Don't get fleeced!
HOME PREPARATION TRADE-IN SKILLS AT THE DEALERSHIP RESOURCES TERMINOLOGY
Dealership Terminology
You need to know all of the automobile dealer terminology and automobile dealer slang before stepping foot into a showroom. An informed buyer is often a car dealer’s worst nightmare. That’s because automobile dealer slang is the way car dealers speak to one another in a shorthand sort of fashion, but they speak directly to you very differently. What they are saying behind your back can be a real eye opener. Here are some of the terms from an actual car dealer slang dictionary.
Read it and you will know what they really mean by their buzz words and slang.
BABYSITTER: Slang term used for a co-signer or co-buyer on an automobile contract; often used where the primary buyer needs help to make a decision or make the buy. BACK END: Back end is the contract which is being sent to the bank for financing, where extra "hidden" profit is made by the dealer; the back end profit occurs because the dealer gets a kickback from the bank just for setting up the loan there instead of somewhere else. BACK OUT THE DEAL: See meaning of Unwind. BEATER: See SLED. BE BACK: Prospective buyer who has been in the dealership once or several times. Did not buy at that time and has returned for additional information or whatever. BIRD DOG: One who refers prospective customers to a particular dealership or salesman for a given fee or compensation. BOUNCE: To bounce someone means to increase the sales price of the car, interest rate, monthly payments, etc. BRICKS: This term is used to refer to one's house as security in taking out a second trust deed loan. BROWNIE: To sell a car to a customer as a result of going around and putting a piece of paper with a message like "call me regarding your car" on car windows on the street. BUMP: See BOUNCE. BUREAU: A credit report on a customer. BUY RATE: This is the interest rate that banks or financing institutions will charge on all contracts being financed. It is a "secret" number between the lender and the dealer which is the real amount of the interest rate that the loan starts out at before the dealer increases it for its own extra profit. A BUYBACK: a vehicle that the manufacturer bought back, usually because it was a lemon, and then was resold, often through a car dealer auction where it can be recycled back into the marketplace, often without disclosure of its true history of defects, also, see laundered lemon. CANDY STORE : A dealership with lots of vehicle inventory. CASH THE DEAL: This means that a third party lender has accepted the finance contract assignment from the dealer and paid the dealer for it. The dealer has their money and this is usually the point of no return as far as the dealer is concerned, i.e., the dealer will most often refuse to unwind the deal. CHASSIS: The frame of a vehicle, may or may not include the engine as part of it, depending on the chassis manufacturer and its construction process. CHISLER: A buyer who constantly grinds the salesman to the best possible deal that he can get. CLIMBER: A salesman who can sell anything to anyone. One who is able to tackle a tough customer and knock them over. CLOSER: Usually a pushy salesman whose job it is to "close" the deal with the customer when the customer hesitates when dealing with the salesman. COLD CANVAS: A form of prospecting where a salesman or dealership solicits any and all prospective buyers in any given
http://fleeced.weebly.com/terminology.html[4/22/2016 6:20:37 PM] Terminology - Don't get fleeced!
area. COME ON: This is where the buyer is led to believe one thing and it turns out to be really something else. DE-HORSE: This is when you take a customer out of his trade-in and let him temporarily drive a borrowed car from the dealership until his purchase is completed. DESK: The floor manager’s central location. It literally is an office location that is typically on the show room floor and glass walled so the Desk Man (the manager) can see everything that is going on. From here the manager controls every deal being worked on. Sales staff go to the Desk to get approval on every aspect of the deal. The Desk controls the payment quotes, the price, the down payment and trade in terms. See Tower. DESKMAN or DESK: A man who both figures and determines what kind of deal the dealership will make to a customer. He is in charge of all financial aspects of every deal and charged with the responsibility of maximizing the dealer profit. DEUCE: This usually refers to a $200.00 figure for whatever reason, down payment, trade-in value, etc. DIP: This is when the customer needs additional or all of his cash down advanced by a finance company. DOORMAN: The name given to the dealer employee who stands at the doorway of the finance manager office, blocking it, when the buyer is sitting in the F&I office and the final paperwork is being signed, an intimidation tactic often used by the salesperson on the deal or the floor manager when the dealer knows there is something in the transaction that the customer does not know or understand and may object to. DOUBLE DIP: To finance purchase between two or more loan companies. DOWN: Short form for down payment. Also used when a salesman is finished talking to a prospective buyer. He is considered to be down and the next salesman is considered to be up and in line to handle the next prospective buyer. DOWN STROKE: Means customer's down payment. EDGY: This is a customer who may or may not be able to get his car financed. EIGHTY FIVE FIFTY FIVE, 8550: This is the GM paint code for black paint. It is sometimes used by a dealer to refer to the race of a prospective buyer as a slang term. It may also occur with other franchised dealers using their manufacturer paint code for the color black. THE ENVELOPE CLOSE - it's where the finance person takes the buyer's copies of all the sales papers and folds them up into an envelope and seals it, or staples it closed, and hands it to the buyer, saying these are important papers on your sale so take them home and put them somewhere safe and secure. The envelope being sealed and being told to put them away, creates a greater likelihood that the buyer won't bother to read them later and see what happened to them in the deal. Look for the staple in the middle of the envelope for maximum fraud because the papers can be disfigured/torn when removing the staple if not carefully done. ETCH, ETCH-A-SKETCH: Often called theft guard or a similar term, it is a soft add on product promoted as a product that will reduce the chance of a vehicle being stolen, to apply it the dealer uses a chemical that eats, or etches, into one or more glass windows a series of numbers that the dealer claims can enable police to find the owner of the car if they recover it after it was stolen, usually sold for hundreds of dollars by a car dealer, the product itself can be found on the internet as a self-installed kit that will cost about $20, the window etch scheme makes maximum car dealer profit at little cost and some say etch gives little or no real benefit to the consumer. ETHER: Is a slang term used in association with its actual application. For example, putting someone in the ether. This is usually done in a closing situation and the customer is not completely aware of what is happening. EYE BALLER: Is a flashy looking, bright colored, usually a sporty type automobile. F and I: Stands for finance and insurance and refers to the sales department that arranges for financing a sale with a third party lender such as a bank or credit union, etc. The department is actually little more than a person who performs the task and who is often called the F and I Manager or Business Manager, even their job is to primarily to sell the customer on the idea of letting the dealer set up their financing and also to sell the customer the soft add on products.This is where most dealers make their highest profit margin. FIRST CHAIR when the dealer’s F&I position is filled by an employee has not previously worked in the F&I job, it is called the employee’s first “chair” meaning his first time in the job. Five Finger Close: A technique used by some car dealers to get the sales papers signed by the consumer without the consumer realizing that the numbers on the papers have been increased above what was orally discussed with the consumer, such as, the dealership Finance Manager holds the stack of sales papers still with one hand planted in the middle of the top document while pointing to the signature line with the other hand and asking the buyer to just sign here and here and here, etc., using their hand to cover up an area of the sales document where numbers appear that the dealer does not want the buyer to see. Then the dealer sets that sales paper aside and puts another one in front of the consumer and again puts one hand in the middle of the page while pointing to the next signature line with the other hand. The process is repeated through all the sales documents so
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that the buyer does not realize that the sales figures were changed on the earlier document, in other words, the repetitive routine disguises the fraud that earlier occurred in the process. It appears to the consumer that the Finance Manager is being helpful in holding the page still but in reality the technique is used to deceive the customer into believing that the numbers, such as the price, etc, are the same as what was talked about earlier when, in reality, they are not. It is sometimes also called a five finger spread or five finger push. Five Finger Fold: Similar to the five finger close. It is another technique used to get the sales papers signed without the consumer knowing that the numbers on the papers have been changed. In this tactic the Finance Manager holds the stack of sales papers still with one hand planted in the middle of the top document while pointing to the signature line with the other hand and asking the buyer to just sign here and here, etc., thus using their hand to cover up the area of the document where the numbers appear that the dealer does not want the buyer to spot. As each individual sales paper is signed, the dealer folds up the bottom edge where it was signed, revealing the next page and the customer is again asked to sign. The process is repeated through all the documents being signed. It appears to the consumer that the Finance Manager is being helpful in holding the page still but in reality they are using the technique to deceive the customer into believing that the numbers, such as the price, etc, are the same as what was talked about earlier when, in reality, they are not. Sometimes called a five finger spread or five finger push. FLAKE: Is a customer who usually has bad credit, little or no money down. It is usually a waste of time trying to put a deal together for him. FLIP: This is to convert a buyer from financing his automobile through his own bank or credit union to financing through the dealership. FLUFF & BUFF: This is where a used car is superficially cleaned up quickly, removing any evidence of the identity of the prior owner such as the original factory new car owner manual and warranty and any repair records in the vehicle, then the dealer puts it out on the dealership used car lot for sale. FLUFFING: Where a dealership employee “fluffs” up a customer’s credit application information in order to get a vehicle loan approved, typically by increasing the stated income amount, decreasing the housing cost number, etc, to make it appear that the customer has a better credit-worthiness than is true, most often without the customer even knowing it is happening since the customer does not see the application after they have signed it and given it to the dealer employee. FULL BORE: To sell a car for the full sticker price with no discount. GOLD BALLS: One who has excellent credit and usually a considerable down payment. GRAPE: This is a very easy buyer. He normally goes along with anything anyone tells him. GREEN PEA: This is a new salesman or sales business manager. GRINDER: This is a buyer who, no matter what the salesman offers, wants more for less. HEAT SHEET: A document in the sales paperwork that the dealer has the customer initial, usually along the right margin, which says that the customer has been made aware of a long list of specific disclosures and disclaimers, many of which may not have taken place at all. Then when the buyer later discovers an act of dealer fraud and returns to complain, the dealer will pull out the Heat Sheet and point to where the buyer signed or initialed saying that the act did not occur or they were informed, etc. In other words, like a heat sink used in soldering metals, the Heat Sheet takes the buyer complaint and neutralizes it. HEN: Older type salesman who influences younger salesmen (adversely). HIGH BALL: A figure given to a prospective customer which is an inflated value of his trade-in in order to get the customer to return to the dealership to purchase his new car. HIGH PENNY: To adjust a customer's monthly payment. For example: from $101.13 to $101.93. It is safe to assume that if the customer will pay $101.13 for a car payment, he will pay $101.93 without giving it a second thought. HIGH PENNY ROLL: is where the finance sales person’s computer is rigged to automatically increase, i.e., roll up, numbers in the transaction to a higher number without tipping it to a dollar increase. Doing this on every transaction can create $20,000 to $40,000 of extra profit a year since it adds 1 to 98 cents to every payment. Also called High Penny or Penny Pumping. HOME RUN: When maximum profit has been made on a deal or when the sales business manager has sold the customer all the insurance he has available. HOPE DEAL: The phrase used by a car dealer to describe a sale that they do not know will be financed by a third party lender but hope to make it work by pulling in favors at the lender to get the financing approved by the lender. HOUSE: When the dealership itself, also called the store; alternative: when referring to a recreational vehicle it is the portion of the RV above the chassis itself and is also called the box. IRON: This is an old used car valued at nothing more than the price of iron. KINK: A problem with a deal due to "miswriting", misrepresentation, misquoting, or mishandling. LAID AWAY: A customer who has paid the maximum price for as many items (like accessories, rust proofing, extended
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warranty, financing and credit insurance) as can possibly be sold on an automobile. LAND THE CUSTOMER: This is when the sales person has identified the type of vehicle the buyer is looking for and found it and has gotten the buyer's attention fixed on purchasing that specific vehicle, such as they have landed the customer on the iron. LAY DOWN: This is a customer who says yes to everything. They "lay down" and get run right over. LAUNDERED LEMON: When a car is bought back by the manufacturer and then resold without disclosure that it was bought back under the lemon law, thus hiding its defect history from subsequent owners, it is generally an illegal practice. LEG as in “giving Leg.” Means getting a leg up on the buyer. Describes the sales person quoting an inflated and false proposed monthly payment number to the buyer in order to lock them in on a false number in order to leave room for the finance sales person to pack into the deal additional profit-making products for the dealership, whether or not the customer knows it is happening to them. See Payment Packing. LIAR LOAN Where the dealer alters the buyer’s credit application income or expense data without the customer knowing about it and then submits the falsified application data to a third party lender for loan approval; may also include telling the lender that the vehicle being sold has optional equipment on it that it actually does not have, in order to increase the appearance of the vehicle’s value as collateral for the loan. LINER: A salesman whose responsibility is to land a customer on one particular vehicle, get a commitment of some type from the customer regardless of how ridiculous it is, and then turn the customer over to his T.O. person, the sales manager or mother. LOADING THE PAYMENT: means to take the normal monthly payment amount and load it up by falsely inflating it to a higher than necessary number in order to leave room for the finance sales person to pack into the deal added profit-making products for the dealership which the buyer may not even know about. See Payment Packing. LOT LIZARD: A the sales people who stand around outdoors on the car lot, usually in small groups of two or three, waiting for a customer to come along so they can pounce on them to make a sale. LOW BALL: This is a sales figure or tenative price given to a customer who has acknowledged the fact that he is not going to purchase an automobile at this time and wants to shop this figure against other dealerships. This is normally an unrealistically low figure and one that the automobile can not actually be purchased for. MICKEY: Slang term used to describe a down payment loan that is arranged by the dealership. This is referred to as completing a deal in Mickey Mouse way. MOTHER: See T.O. MAN. MOUSE HOUSE: Slang term used for a finance company. NEGATIVE EQUITY: Negative equity means that your trade-in vehicle has a fair market value that is less than what you owe on it. This could be because you have not owned it very long and you still owe a very high payoff on it. It could also be because the last dealership you traded a car in, and who sold you this one, started you on this “negative equity” cycle. Click here for more information about Negative Equity Car Dealer Scams. NICKEL: Refers to $500.00 for either trade value, purchase price, cash down, etc. PACK: this has two applications. First, it is used to describe the overhead deduction from the sales person’s commission. The dealer will deduct anywhere from $100 to $700 from the gross profit of the deal and pay the salesman his commission which is figured on the difference. The dealership (also called the house) calls the deduction a dealer pack but it is really just a way of reducing the commission the sales person has earned in a deal. In the second use of the term, it is used in relation to payment packing, which is where the sales person quotes a higher than necessary monthly payment number to the buyer in order to overcome objections when the finance sales person jacks up the payment even more because they are adding into the deal, with or without the buyer knowing it, soft add on products like Etch or extended warranties, etc. For example, the sales person knows that the normal monthly payment amount might be $275 but they deliberately tell the buyer that it will be $325 so that there is $50 of room for the finance sales person to pack the deal with added-cost soft add on products. PAYMENT PACKING: where the sales person quotes a higher than necessary monthly payment number to the buyer in order to overcome objections when the finance sales person jacks up the payment even more because they are adding into the deal, with or without the buyer knowing it, soft add on products like Etch or extended warranties, etc. For example, the sales person knows that the normal monthly payment amount might be $275 but they deliberately tell the buyer that it will be $325 so that there is $50 of room for the finance sales person to pack the deal with added-cost soft add on products. A more deceptive way of payment packing is to get the buyer to agree on a monthly payment number without the buyer knowing the loan length. That way the finance sales person can create more profit in the deal by simply upping the loan length without the buyer even realizing that the overall cost to the buyer is higher than it otherwise would be. PENCIL: This has two applications. First, a sales manager will pencil a salesman's deal by crossing out the customer's offer and penciling in the figure that he wants to get for that car. The second application is used when a salesman or sales manager changes the selling price or trade-in allowance and covers it up with an increase in the customer's monthly payment because of the additional cost he expects to pay for Credit Life, Accident and Health Insurance.
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PIPE SMOKER: A customer who smokes a pipe, gives no commitments whatsoever, usually grinds the salesman to his last thread and doesn't buy the car after all. PUT TOGETHER: This means much the same as "laying someone away". In other words the maximum gross profit to be made on that deal was accomplished. RATE SHEET : The Dealer Reserve Schedule used by F & I salesperson to determine the amount of the kickback they will get from the bank or other lender who is going to finance the sale, in exchange for bumping the interest rate up above the minimum rate that the lender actually wants to get on the loan. RESERVE: Sometimes thought of as a "kickback" the bank gives the dealer for setting up the loan. The income a dealership realized on a contract in excess of the finance source's discount rate. For example: If the bank is going to charge $600.00 in finance charges on a given contract and the total finance charge to the customer on this contract is $1,000.00, the dealership will realize $400 in "reserve money" but the customer thinks the interest is all being charged by the bank. RESIDUAL: This is the termination value of an automobile that is being leased. The number on the lease contract may be real or simply made up. ROLL BACK: To work a deal backwards. Instead of working with the purchase price and trying to determine a monthly payment, you would start with a known monthly payment and try to determine a selling price. It also means to "roll back" the odometer on a car to make it worth more money - highly illegal. ROLL TERM: As in to Roll the Term. It means to stretch the buyer’s loan out to a longer term without telling the buyer that it is happening in order to keep the monthly payment inside the buyer’s target while still increasing the dealer’s profit in the deal. RULE OF 78: A mathematical formula used in figuring a rebate of unearned charges or premium, when these charges were pre- computed and pre-paid. Once referred to as "78 ways we get to keep your money". SEALING THE CUSTOMER: Means the customer sales paperwork has been signed and put in an envelope which was licked and sealed and put in their hand, usually with the dealer sales person telling them that the envelope contains important sales papers that the customer should take home and put in a safe place. If the dealer has packed the deal with soft add on products that the buyer does not know about, doing this detracts from the fraud since it discourages the buyer from looking at the numbers to make sure they are what the sales person said they would be. If the dealer staples the envelope, it may mean that the dealer is definitely trying to hide something printed on the sales papers by making it more difficult for the papers to be removed without tearing them, usually right in the spot where the false number is typed. SERVICE LANE WALK: Describes the activity of a dealer salesperson trying to sell replacement vehicles, new or used, to people who have brought their vehicle into the service department for repair work to be done. SHADOW: What a green pea does to lean how senior salespeople sell, i.e., they follow them around and observe. SHOUT OUT: When the customer commits to the buy, the salesman loudly announces, sometimes on the dealer's public address system, that "[buyer's name] has just purchased a [year make model Rv vehicle]" (that is the "shout out" moment) which is followed by immediate applause from all the other sales persons in the showroom, a tactic to solidify the buyer's commitment to the sale, often used in slasher sales. SIGNED, SEALED AND DELIVERED: Generally means the same thing as SEALING THE CUSTOMER. SLASHER: Slang job title for highly aggressive temporary sales person or sales staff that a dealer brings in to stage a quick sales event, usually over a weekend, with the specific purpose of selling vehicles that have been sitting on the dealer lot (called stale inventory) for more than the normal number of days unsold; this type of sales team is usually flown in from out of state and typically is made up only of very strong (see term definition below) and pushy and aggressive sales people whose sole objective is to make sales happen one way or another. SLED: Reference quite often given to a customer's old trade-in which is usually "beat up" and worth little or nothing. SLIDE RULER: A buyer who is a specification nut. He does not deal in generalizations when prices are quoted. They must be exact and justified most of the time. This buyer will have a slide ruler or a pocket calculator with him to calculate his own sales tax and total sales price. SOBRE: Spanish word which generally means the same thing as SEALING THE CUSTOMER when the customer is of Hispanic heritage. SOFT ADD ON: This refers to the items sold by the F&I Manager which increase the overall vehicle transaction price to the consumer but add no hard value to the goods being sold, which is why they are called soft add on items. They typically include such things as service contracts, Etch, disability insurance, wheel protectant, Gap insurance, etc. Many times these additional items are preprinted on the sales and financing forms. This is where most dealers make their biggest profit margins in a deal. SPEAR: Think of it like in the movies when the Indian would "spear" a fish in the stream for his dinner. This is just a method used in getting a customer onto a dealer's lot. For example: Stopping a man on the street and telling him that you would give him some outrageous figures for his trade-in if he would just come down to the dealership today and take a look at what you
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have to offer. SPIFF: A bonus paid to a sales person as an extra reward for selling a particular vehicle. It may be paid by the dealership itself or, in the case of a new vehicle, by the vehicle manufacturer. Often is between $50 and $250 but the amount will vary. SPOT DELIVERY: This is when all phases of the purchase and delivery are completed the same day and a few days or so later the dealer calls the customer back and claims they have to sign a new finance contract or put more money down or that the lender requires the buyer to get a service contract or extended warranty in order to get loan approval, etc. It may or may not be true. It sometimes is used by a dealer to strong arm the buyer into buying more soft add on products in the deal. Sometimes this is also called a Yo Yo. STALE: This refers to a vehicle on the dealer lot that the dealer thinks has been sitting unsold for too long. STEAL THE TRADE: This refers to a vehicle that the customer is trading in where the dealer will often nick pick the car so much so that they will attempt to give the customer false expectations of the true value of their trade-in and give them several thousand dollars below market value for their car, this is a major profit line for the dealership, and this does not count towards the gross pay to the salesman. It also increase the over tax liability the consumer pays in the end. STICKS: Reference given to the borrower's furniture he puts up as collateral on a small loan, such as when he borrows the money for the down payment on the car he is getting ready to buy. STRAW PURCHASE: This is when a third party buys an automobile and finances it in his name for some else (who will be the actual driver) because of that other person's age, bad credit, or lack of credit, etc. STROKER: An individual who gives the impression that he wants to buy a car, but really doesn't have the means to do so. STRONG: This word has two possible meanings. When used in reference to an automobile, it indicates that the car is a good seller and therefore, an above average profit can normally be made on it so the dealer can get away with charging a premium price, often above the sticker price or other normal market value. The second application would refer to a sales individual, be it salesman, sales manager, Sales Business Manager, a closer, etc, and means their ability to be aggressive and pushy to make a sale happen when the customer is wavering or doubtful of the deal being offered. STUD: See second application of STRONG. "SUM OF THE DIGITS": Another term used for the "RULE OF 78" - a formula used in figuring refunds or rebates of money paid for a soft add on product like insurance or etching, sometimes referred to as "78 ways we get to keep your money". SWITCH: To change a customer from buying one car to another for several reasons: availability, possible profit, etc. THIRD BASEMAN: An individual who accompanies a prospective buyer because the buyer feels he is better versed in haggling over the price of the car and/or knows more about the car mechanically, thereby decreasing the chances of getting stuck with a "lemon". TIRE KICKER: This is normally an individual who doesn't want to buy a car, but just wants to look. He walks in, touches the merchandise and doesn't want to talk to anyone. T.O. (TURNOVER): The procedure used in selling where the salesman or liner turns a prospective buyer over to another salesman or sales manager to close the sale. T.O. MAN: This is the individual to whom a LINER will turn a customer over. TOAD: Reference given to a customer's trade-in; a worn-out piece of machinery that is just "sitting there" like a toad. TOWER: the floor manager’s central location. It literally is an office location that is typically on the show room floor and glass walled so the manager can see everything that is going on. From here the manager controls every deal being worked on. Sales staff go to the tower to get approval on every aspect of the deal. The tower controls the payment quotes, the price, the down payment and trade in terms. UNWIND THE DEAL: To cancel a vehicle sale or lease like it never happened at all, i.e., the dealer takes back the vehicle and may or may not refund the customer down payment or give back the customer trade in vehicle. The dealer may or may not have a legal basis to unwind the deal. But universally dealers do not want to do it. UP: This refers to the prospective buyer and is a generic terms for any potential customer. YO YO DEAL: This is when all phases of the purchase and delivery are completed the same day and a few days or so later the dealer calls the customer back and claims they have to sign a new finance contract or put more money down or that the lender requires the buyer to get a service contract or extended warranty in order to get loan approval, etc. It may or may not be true. It sometimes is used by a dealer to strong arm the buyer into buying more soft add on products in the deal. Sometimes this is also called a Spot Delivery.
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