Like with any industry, car dealerships have their own
jargon. When you walk into a dealership, you may hear the salespeople using
terms like "invoice price," "MSRP," and "residual
value," but do you really know what they mean? It's important for
consumers to understand these terms so that they can make an informed
purchasing decision. Read on to understand the key terms you may hear at the dealership.
price: The invoice price is the original amount the car
dealership pays the car manufacturer for each vehicle. This price does not
always reflect the dealer's final cost due to rebates, discounts or incentives.
stands for Manufacturer's Suggested Retail Price. Also referred to as the
sticker price, this is the figure that's most visible on the car's window
sticker. It's also the price listed in advertisements for the vehicle.
Dealerships often begin negotiations at the sticker price. Unless the vehicle
is brand new or the model is in high demand, cars can sometimes be bought for
less than the sticker price.
Value: Residual value refers to how much the car will be worth
at the end of its lease. Dealers use residual value to calculate the lessee's
monthly payments. Generally, the longer the lease period, the lower its residual
Value: This is the actual market value of a leased vehicle at
the end of the lease.
Percentage Rate (APR) is the total amount you pay for your auto loan, including
the interest rate and other fees. It is expressed as an annual percentage of
the amount financed. With fixed-rated financing, the APR stays the same over the
course of the contract. With variable-rate financing, the APR increases after a
specific time period.
Asset Protection (GAP) is an optional coverage for car buyers. It protects you
in the event that your car is stolen or totaled in an accident. GAP covers the
difference between what is owed on the car loan and what is covered by
If you come across other terms you don't understand
during your visit to Springfield Toyota,
don't be afraid to ask the salesperson to explain them to you. You want to
ensure you understand the terminology and the terms of the sale before moving
Labels: Auto Dealers in NJ, Autoland in Springfield, car buying tips, leasing, terminology, Toyota Lease Deals NJ