Sales & CRM
- DMS (Dealer Management System)
- The core software a dealership runs on — inventory, customers, deals, accounting, and reporting in one system. It’s the operational hub the rest of the dealership’s tools connect to.Learn more
- CRM (Customer Relationship Management)
- The system that tracks leads and customers through the sales funnel — capturing inquiries, logging follow-ups, and routing opportunities so no prospect falls through the cracks.Learn more
- Lead
- A potential buyer who has shown interest — submitting a website form, calling, or walking in. Leads are worked through statuses (new, engaged, appointment set, sold/lost) until they convert or close out.
- Spot delivery
- Letting a buyer take the car home before financing is fully approved (“on the spot”). It carries unwind risk if the loan isn’t funded, so it’s tightly regulated in many states.
- Trade-in / ACV
- A vehicle a customer trades toward a purchase. ACV (Actual Cash Value) is the wholesale value the dealer assigns it — distinct from the allowance shown on the deal, which may be inflated and offset elsewhere.
- Desking
- Structuring and presenting a deal’s numbers — price, trade allowance, taxes, fees, down payment, and monthly payment — to the customer, usually back and forth until terms are agreed.
- Buyer’s order
- The binding summary of a vehicle sale: price, trade, fees, taxes, and total. The “deal jacket” is the folder (paper or digital) holding the buyer’s order and every other document for that deal.
- Up
- Dealer slang for a prospective customer who arrives ready to be worked — “a fresh up” is a new walk-in. Tracking ups and their close rate is a core CRM metric.Learn more
F&I & financing
- F&I (Finance & Insurance)
- The dealership office that arranges financing and sells protection products (GAP, service contracts) after the sale price is agreed. “Back-end” gross comes from F&I; “front-end” gross is the vehicle margin.Learn more
- BHPH (Buy Here Pay Here)
- A model where the dealer finances the buyer in-house and collects the payments directly, instead of routing the loan to a bank or lender. The dealer carries (and services) the note.Learn more
- RIC (Retail Installment Contract)
- The financing agreement between buyer and dealer for a car paid over time. It must disclose the amount financed, APR, finance charge, and total of payments under federal Truth in Lending (TILA).
- TILA (Truth in Lending Act)
- The federal law requiring clear, standardized disclosure of credit terms — APR, finance charge, amount financed, and total of payments — in the familiar boxed format on a retail installment contract.
- GAP (Guaranteed Asset Protection)
- An optional product that covers the “gap” between what a buyer still owes and what insurance pays if the vehicle is totaled or stolen while underwater on the loan.
- VSC (Vehicle Service Contract)
- An extended-warranty-style product that pays for covered repairs after the factory warranty ends. A common F&I back-end product, sold per-deal.
- Amortization
- How a loan is paid off over time: each fixed payment splits into interest on the remaining balance and principal, with the balance reaching zero at the final payment.Learn more
- Front-end vs. back-end gross
- Front-end gross is profit on the car itself (sale price minus cost, pack, and discounts). Back-end gross is earned in the finance office after price is set — rate reserve, service contracts, GAP, and protection products.Learn more
- Buy rate & dealer reserve
- The buy rate is the interest rate a lender approves for the buyer. If the contract is written above it, the spread is the dealer’s reserve (participation) — a common source of back-end gross, subject to fair-lending rules.
- APR vs. interest rate
- The interest (note) rate is the cost of borrowing the principal. The APR is that rate plus lender fees, so it is usually higher — and, under the Truth in Lending Act, the standardized figure for comparing loan offers.Learn more
- Simple vs. precomputed interest
- Most U.S. auto loans use simple interest, which accrues on the actual remaining balance — so paying early saves interest. Precomputed interest is figured up front and added to principal; the Rule of 78s is a precomputed method that front-loads the finance charge.Learn more
- Negative equity
- Being “upside down” — owing more on a loan than the vehicle is worth. Because principal pays down slowly early while cars depreciate fast, buyers can be upside down for much of a long loan.
- Balloon payment
- A large one-time payment due at the end of a loan term (generally more than twice the regular payment). It lowers the monthly payment but leaves a lump sum at maturity, unlike a fully-amortizing loan that ends at $0.
- Subprime
- A credit tier for borrowers with lower credit scores, who are offered financing at higher rates to offset risk. “Deep subprime” is the lowest tier — a core market for many BHPH and independent dealers.Learn more
- Adverse action (ECOA)
- Under the Equal Credit Opportunity Act, when a credit application is denied or approved on worse terms, the dealer/creditor must give the applicant a notice stating the principal reasons — an adverse-action notice.Learn more
Inventory & operations
- VIN (Vehicle Identification Number)
- The 17-character code that uniquely identifies a vehicle and encodes its build specs (year, make, model, engine, plant). Decoding it pre-fills inventory and confirms exactly what a car is.Learn more
- Floor plan
- A revolving line of credit a dealer uses to finance inventory. Interest accrues daily per vehicle until it sells, so floor-plan cost is a core part of a unit’s holding cost.Learn more
- Curtailment
- A scheduled partial principal paydown a floor-plan lender requires after a vehicle has been floored for a set period (e.g. 10% at 90 days), reducing the balance interest accrues on.
- Holding cost
- What it costs to keep a vehicle in inventory each day it’s unsold — primarily floor-plan interest, plus lot overhead. It erodes gross profit the longer a unit ages.Learn more
- Reconditioning (recon)
- The work done to make an acquired vehicle retail-ready — detailing, mechanical repairs, tires, etc. Recon cost is subtracted from gross to find a unit’s true net profit.
- Pack
- A fixed amount a dealership charges each unit to cover overhead (rent, utilities, admin) before figuring commissionable gross. It varies by store.
- Inventory turn
- How many times a dealer sells and replaces its inventory in a period. Faster turn means less holding cost and fresher stock; “days to sale” (or age) measures the same idea per unit.
- Doc fee
- The documentation (or “processing”) fee a dealer charges to prepare and file paperwork on a sale. Some states cap it; it’s part of the out-the-door price.Learn more
- Out-the-door price
- Everything a buyer actually pays to drive away: vehicle price plus sales tax, doc fee, and title/registration — minus trade-in credit and rebates. Almost always higher than the advertised price.Learn more
- Wholesale vs. retail
- Wholesale is the dealer-to-dealer (auction) value of a vehicle; retail is the consumer asking price. The spread, minus recon and holding cost, is where used-car gross comes from.
- Days’ supply vs. days to sale
- Days’ supply measures the whole lot — how many days of sales the current inventory represents. Days to sale (age) is per-unit — how long a specific car has been in stock. Both track how fast you turn.
- PVR / GPU
- Per-Vehicle Retail (a.k.a. Gross Per Unit) — the average gross profit per car retailed. A headline benchmark for a store’s pricing power; among public retailers it ran near $1,500 on used in 2025.Learn more
- Advance rate
- The share of a vehicle’s value a floor-plan lender will lend against it — often 95–100% of cost on new units and roughly 75–90% on used. Independents usually sit at the lower end.Learn more
- Sold out of trust
- Selling a floored vehicle without immediately paying off its floor-plan balance. Because the inventory is the lender’s collateral, it’s a serious default that floor checks are designed to catch.Learn more
- Frontline ready
- A unit that has finished reconditioning, photography, and pricing and is ready to sell. Time-to-frontline is dead time — the car incurs holding cost while it waits, before it can earn.
Titling & compliance
- Title / titling
- The legal document of vehicle ownership. After a sale the dealer prepares the title application and transfer paperwork for the state DMV — the titling process that registers the new owner.Learn more
- Lienholder
- The bank, credit union, or finance company that holds a security interest in a financed vehicle. The lien is recorded on the title until the loan is paid off.
- Odometer disclosure
- A federally required statement of a vehicle’s mileage at sale (and whether it’s actual, exceeds mechanical limits, or not actual). Required on most transfers to combat odometer fraud.
- OFAC screening
- Checking a buyer against the U.S. Treasury’s sanctions (SDN) list before completing a sale. A potential match must be reviewed and cleared — dealers are expected to screen and keep records.Learn more
- Red Flags Rule
- An FTC rule requiring dealers (as creditors) to have an identity-theft prevention program — reasonable procedures to detect and respond to “red flags” of identity theft during financing.Learn more
- FTC Safeguards Rule
- An FTC rule requiring dealers to protect customer financial information with a written security program — a designated qualified individual, risk assessments, employee training, and incident response.Learn more
- NMVTIS
- The National Motor Vehicle Title Information System — a federal database of title, brand (salvage/junk), and odometer data used to verify a vehicle’s history and prevent title washing.
- Vehicle history report
- A paid report (e.g. Carfax or AutoCheck) compiling a vehicle’s title, accident, service, and odometer records. Distinct from a free VIN decode, which shows build specs but not history.Learn more
- FTC Used Car Rule (Buyers Guide)
- The FTC rule requiring a “Buyers Guide” window sticker on most used cars offered for sale, disclosing whether the vehicle is sold “As-Is” or with a warranty, and the major systems to inspect.Learn more
- As-is sale
- A sale with no dealer warranty — the buyer accepts the vehicle’s condition and assumes the cost of any repairs after purchase. Must be disclosed on the FTC Buyers Guide; some states restrict or ban as-is sales.
- Branded title
- A title permanently marked with a condition such as salvage, flood, junk, rebuilt, or lemon-law buyback. Brands follow the vehicle across states and sharply affect value; they’re reported through NMVTIS.
- Temporary tag
- A short-term registration that lets a buyer legally drive a just-sold vehicle while the permanent title and plate are processed. Issuance rules and durations are set by each state.
- Secure power of attorney
- A controlled, serialized power-of-attorney form (e.g. Florida’s HSMV 82995) used when the dealer signs odometer and title paperwork on the buyer’s or seller’s behalf — tightly regulated to prevent odometer fraud.Learn more
- Lien release
- The document a lender provides when a loan is paid off, releasing its security interest so the title can be cleared. Required before a clean title transfers to the next owner.
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