Purchasing a new car is an exciting time for any car driver, but it's helpful to have a basic understanding of car buying terminology before you begin searching for your next vehicle. Understanding common auto buying terms can help clarify what you’re looking for, what you’re getting, and exactly how much you’re paying.
Whether buying new, used, or leasing, use this Car Buyer’s Glossary from Sierra Blanca Motors as a resource during the buying process. Ready to skip right to the fun part? Start browsing our exceptional selection using the buttons below.
Common Car Buying Terminology
To make the car buying process easier, we've compiled a list of the most common car buying terminology you'll come across on your purchasing journey. By remaining aware of key car buying terminology, you'll be ready to purchase your next vehicle with confidence.
Acquisition Fee (Bank Fee)
If you're leasing a vehicle, the acquisition fee is the price you will pay to start the lease. This fee typically includes the cost of running credit checks and other administrative processes. The acquisition fee is rarely avoidable.
Annual Percentage Rate (APR)
The annual percentage rate, or APR, is the amount of interest you will pay over a year on your loan. If you're planning on financing your new car purchase, knowing the APR is critical because it affects the overall amount you pay.
Base Price
The base price is the starting price of a vehicle. While it will include factory settings, warranty, and other core elements, it will not include additional features or add-ons.
Blue Book Value
Kelley Blue Book is a well-regarded car valuation resource that is often used in the second-hand car buying industry. This info is particularly valuable if you are trading in your old vehicle and need to know its estimated value as part of the new car purchase agreement.
Dealer Incentives
Dealer incentives are discounts, specials, or other benefits that may be offered by a vehicle manufacturer to a dealership. These typically benefit customers who are trying to purchase vehicles during the low season.
Drive Off Price
The drive-off price is effectively the amount of money you will need to pay to drive the car home from the dealership. This price is the amount that is due at the time of purchase.
Limited Warranty
In most cases, a new car will have a 'limited warranty' that is limited based on mileage and 'years owned' perimeters.
MSRP
MSRP stands for Manufacturer's Suggested Retail Price, which refers to the price the manufacturer sets for its dealerships.
Rebates
In some cases, a car dealership will offer cash rebates if you purchase or lease a vehicle. It's critical to read the terms of any rebate offerings carefully before you make any financial commitments.
Trade-In Value
The trade-in value refers to how much your car is worth when you trade it into a dealership as you're purchasing a new vehicle. This value is often negotiable, and you should ensure to assess the market value of your car before you accept a dealership's trade-in value.
Sierra Blanca Motors | We Make it Simple!
At Sierra Blanca Motors, we operate with integrity. That includes making sure you have all the information you need to make a smart car-buying decision. Providing resources like this car buyer’s glossary is just one way we ensure you’ll be happy with your next vehicle.
Looking for more car buying resources? Check out these helpful blogs: How to Finance a Car: A Guide to Auto Loans and What is the Best Car for My Needs?
If you have any questions about the terms on this page, or if you have any questions about the car buying process, feel free to contact Sierra Blanca Motors. As a family-owned car dealership serving Ruidoso, NM for over 50 years, there’s nobody better to ask!
