Glossary of Automotive Terms

SELLERS Click Here to set up an account and easily list your car today!

BUYERS Click Here to search our extensive online database of vehicles!

Agent/Broker:

a liaison with legal authorization to act on behalf of a manufacturer

Actual Cash Value:

the value that a dealer has put into the car for sale. This includes the amount spent on purchasing and repairing a used vehicle.

Base Model:

The most basic model of a type of vehicle. This model will be the least equipped and have the fewest functions.

Cost of Production:

The actual cost for a manufacturer to make the vehicle. This figure does not include mark-up.

Depreciation:

The value that a new or used vehicle decreases. Factors that will affect this include the amount of use that the vehicle gets, the make and model of the vehicle as well as the demand for and supply of the particular vehicle model.

Domestic:

a vehicle made in the US, Canada, or Mexico

Front-Wheel Drive:

a vehicle where turning is left up to the two front wheels. As well, the front wheels have all the power so that they pull the whole vehicle.

Horsepower:

measures the mechanical power of a vehicle. The higher the horsepower, the more powerful it is. This measure is basically calculated from the engine speed and torque of a vehicle.

Lease:

an agreement where use of a vehicle is given for a certain period of time in exchange for a set fee that reflects the depreciation that the vehicle will undergo from the use.

Manufacturer’s Suggested Retail Price (MSRP):

Also known as the sticker price – this is the suggested price that the dealer is asking for the vehicle.

No-Fault Insurance:

This type of insurance will cover you and your car in the event of an accident. It does not matter whose fault the accident was since your insurance will not be required to pay for both sides of the accident.

Options:

Functions that are not available in the base model of a vehicle but that can be added for an additional cost.

Redline:

The point at which a vehicle’s engine is at the maximum rpm that it can safely endure.

Residual:

An estimate of the market value of a vehicle after the lease term has ended.

Tariff:

The duty fees or taxes that are imposed on imports.

Torque:

The greatest quantity of force that is created from a vehicle at a certain speed.

Vehicle Identification Number (VIN):

A code consisting of 17 digits that is used to identify an individual vehicle. This number is often used to look up the history of a specific vehicle.

Wholesale Value

The amount that a retailer should pay for a vehicle.