10 terms you should know when buying your new car in 2022
If you’re in the market for a new car, you’ll likely need to visit a car dealership. We understand that car dealerships can be confusing places, especially if you’re not familiar with the terminology we use. Here at Findlay Volkswagen, we aim to be clear and transparent, and that starts with making sure you understand the process and verbiage used in buying your new car. Whether you’re a first time buyer, or have been around the block, allow us to define and explain ten common car dealership terms frequently used in the buying process. And remember, if you ever come across a car buying term that does not make sense to you, reach out to us! We are happy to help!!
- The first term we’ll discuss is “MSRP.” MSRP stands for “manufacturer’s suggested retail price.” This is the starting point for the price of a car.
- The next term is “dealer mark-up.” This refers to the amount of money the dealer adds to the MSRP of a new car. This can also be referred to as a ‘market adjustment’. Here at Findlay Volkswagen, the only time you’ll see something like this is on a rare model car – a Volkswagen Golf R for example.
- If you’re looking to finance your new car, you’ll likely hear the term “APR.” APR stands for “annual percentage rate.” This is the interest rate that will be applied to your loan balance.
- The next term is “term length.” This refers to the length of time in months you have to pay off your loan. Common term lengths are 48, 60 or 72 months. Shorter or longer terms may also be available.
- If you’re trading in your old car, you’ll need to know about “trade-in value.” This is the dollar amount that your current car is worth. This amount will be applied towards any outstanding loan balance for this car. The difference between trade-in value and balance owed (positive or negative) may be applied to your new loan in some scenarios.
- You may be asked for a “down payment” at the time of purchase. This is the initial investment towards your new car. It is encouraged that this amount include your taxes and fees, but that isn’t always necessary. Every situation varies, so together we will review your unique position.
- Next up is “monthly payment.” This is the amount of money you’ll need to pay each month to finance your new car. Your monthly payment will be based on the final amount financed, interest rate, and term (the length of time in months you have to pay off your loan) of the loan.
- On the car’s sticker, you may see a “destination charge”. This is a fee that covers the cost of shipping the car from the factory to the dealership. It is listed on the window sticker (also called a Monroney sticker) as “destination charge” and is included in the MSRP of the vehicle.
- The “taxes and fees”… Taxes are simply the sales tax, just like when you buy a TV or a pair of shoes. Fees include standard dealer doc fee, state title fee and on pre-owned cars, an emissions fee. Fees do NOT include registration.
- Looking at a specific model, but see different “trim level” options? This refers to the different packages, optional amenities and specific features that can be added to a car model. The best “trim level” for you will depend on your individual preferences. Different trim levels are why the same make and models have different price tags. A knowledgeable sales person will walk you through your range of options at Findlay Volkswagen.
A few things to keep in mind when you’re at the dealership:
Sometimes you may think that dealership salespeople are just paid to sell cars, and may not always have your best interests at heart. At Findlay Volkswagen, we value our customers, are with you throughout the entire deal, and are here for you after your purchase is complete. We base our business off of transparency and honesty, will always make a fair deal and are striving to change the perception of the traditional “car business”.
If you feel overwhelmed or confused, allow us to help navigate the loan process for you. We are here for you and are happy to answer your questions along the way.
Now that you know these 10 common car dealership terms, you’re one step closer to being a car-buying pro! Do you have any dealership tips to share? Let us know in the comments below!