Speak the Language.

The better informed you are, the more likely you are to get the car you want at the best deal you can negotiate. Half the battle can simply be; understanding the dealership lingo. The following are terms you will probably hear at the dealership; terms you should become familiar with so you can speak the salesperson’s language.

Dealer holdback

This is a payment – typically between two and three percent of the suggested retail price – that manufacturer's pay dealers. This means a buyer can pay less than invoice price and the dealer will still make a profit.

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Dealer incentives

Manufacturers occasionally offer incentives to dealers to increase the sales of slow-selling models or to reduce excess inventory. Dealers can choose to pass the savings on to the buyer so if you know an incentive program is in place you can use this in your negotiation.

Dealer preparation charges

This is an extra fee that dealers may try to pass on to buyers to increase their profit. It represents pure profit for dealers, who have already been paid by the manufacturer for the cost of preparing the car for sale. Do not pay this unnecessary charge.

Invoice price

This is what the manufacturer charges the dealer, however it may not be the dealer’s final cost, as manufacturers often provide rebates and incentives to dealers. The invoice price includes freight, also known as the destination charge.

Rebate

Manufacturers will occasionally reduce the price of vehicles as an incentive to buyers. Dealers will often use these rebates to entice people who have no cash for a down payment or who do not have great credit.

And here is something “They” might not tell you at the Dealership:

Getting the Best Loan First Can Mean Getting the Best Auto Deal

One of the best ways to get a good deal is to qualify for a competitive loan and pay the lowest interest rate possible. You can improve your chances of qualifying for a competitive loan by:

• Waiting six months after graduating from college to apply

• Waiting six months after you move to apply

• Having a previous car loan or home mortgage on your record

• Paying your credit card balances down as much as possible

• Waiting three years after bankruptcy to apply

• Having examples of credit extended to you on your credit report

• Keeping your debt load and credit card balances reasonable

• Closing old accounts so they do not impact your credit score.