Common Car Sales Terminology First Time Car Buyers Should Know

Common Car Sales Terminology First Time Car Buyers Should Know

The car sales industry in the United States is booming. Around 18 million new cars are sold each year.

The numbers for used car sales are less certain, but when you look at the market as a whole it’s clear to see how active it is. 

Therefore, if you’re buying a car this year, you’ll have plenty of options. If you’re relatively new to the art of buying cars, however, you might not be that well acquainted with the language of car sales.

Read on as we look at some of the key terms you’ll need to know when buying your next car.

The Language of Car Sales

Like every other professional, the car salesperson has a certain vocabulary that won’t always make much sense to anyone outside the industry.

Just as lawyers talk about affidavits and subpoenas, and doctors talk about intubation and aortic valves, a car salesperson has industry-specific language that is designed for use with other car salespeople.

They don’t do this to confuse or alienate outsiders. Rather, it’s just a useful shorthand for terms and concepts that they are familiar with. Once you learn a little about them, you’ll see that they aren’t anything to be intimidated by.

Automobile Jargon

Cars are complex machines, especially nowadays. Unless you’re someone with a broad knowledge of the mechanics of automobiles, a lot of the technical language that sales specialists use when discussing cars is likely to be foreign to you.

However, to make sure you’re getting a good deal on a car that meets your needs, you’re going to have to become familiar with elements of this language.

Below are a few of the most common technical terms you’ll hear in discussions about cars.

V-Type Engine

You may have heard references to “V6” or “V8” engines in discussions about the performance of cars.

V-type engines are made up of cylinders that are molded into a “V” shape. V6 engines have six cylinders, V8 engines have eight cylinders,  and so on.

Catalytic Converter

Catalytic converters reduce the amount of harmful gas released from exhausts into the atmosphere, making cars more environmentally friendly.

Catalytic converters achieve this through chemical reactions. Because of their positive environmental impact, catalytic converters have been mandatory in newly-made cars in the United States since 1975.


This is the collective name given to components of a car that allow it to move forward or backward. 

The parts that make up a vehicle’s drivetrain vary depending on whether the vehicle is a front-wheel or rear-wheel-drive car. In a front-wheel-drive car, it refers to the transaxle, drive axles, and engine. On a rear-wheel-drive car, it is the engine, transmission, driveshaft, and differential.

Business Terms

There are many insider terms that relate to the making of losses or profits on automobile transactions. Most of these are not specific to the car sales industry and can be heard in discussions about sales of any kind.

We’ve listed some of the most common here.


Depreciation refers to the amount of value a car loses from year to year. This is particularly relevant to the sale of used cars, as a car from 2018 will be worth more than the same make and model from 2016.

Buyer’s Order

This is a summary of the terms that you have agreed with your sales agent at a certain point in the sales process. A buyer’s order is not the same as a final contract of sale.

Manufacturer Suggested Retail Price (MSRP)

The MSRP is a number you’ll often see on car dealership websites. It refers to the price that a car manufacturer recommends that dealers sell their cars at.

It is merely a suggestion and is not binding on dealers. Dealers usually undercut this price.

Sales Speak

Salespeople have their own set of terms when it comes to the actual art of selling as well. While they have extensive knowledge of cars, the real expertise of selling agents lies in making sales.

There is a certain amount of jargon that comes with this.

Below are some of the key terms you might hear when interacting with a car sales professional.

Be Back

A “be back,” or some variation on this term refers to a customer who has made inquiries about a car, but has said they will “be back” rather than closing the sale on that day. 


You may hear the term “nickel” thrown about by car dealers. In case you hadn’t already guessed, it’s not referring to five cents; sums like that are rarely relevant to the purchase and sale of cars!

In the context of car sales, nickel means five hundred dollars. Getting “an extra nickel” on a sale, therefore, means securing this much more for a car.

Straw Purchase

A straw purchase happens where someone buys a car on behalf of someone else. This is usually because the latter has poor credit.

Getting the Best Deal on Your Next Car

The language of car sales can be a little confusing at first. When you overhear two sales professionals talking about their job in full flow, you might understand very little of what they say!

However, there’s nothing to be afraid of. Once you develop a little bit of knowledge about these terms, you’ll be able to understand how they’re used. Remember, car sales professionals are there to serve you and help you find the best car for your needs.

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