- ACV (actual cash value)
- What a trade-in is actually worth to the dealership, based on its appraisal. Different from what the customer is shown as their trade allowance.
- Back-end gross
- Profit made in the F&I office from financing and products like service contracts and GAP coverage.
- BDC (business development center)
- The team that answers internet leads and phone calls and sets appointments for the sales floor.
- Be-back
- A customer who leaves saying they'll come back. Most don't, unless the salesperson follows up well.
- Buy rate
- The interest rate a lender approves a customer for, before any dealer markup.
- Chargeback
- Commission taken back from a salesperson when a deal unwinds or a product is cancelled.
- CSI (customer satisfaction index)
- Manufacturer surveys customers fill out after buying or servicing a vehicle. Scores often affect dealer and salesperson pay.
- Demo drive
- The test drive. Called a demo because the salesperson demonstrates the vehicle before the customer drives.
- Desk / desk manager
- The sales managers who structure deals, approve numbers and decide what's presented to the customer.
- Doc fee
- A dealership fee for processing the paperwork on a sale. Limits vary by state.
- Draw
- An advance against future commission, often paid to new salespeople while they ramp up.
- Equity
- When a customer's vehicle is worth more than they owe on it. Positive equity makes trading easier.
- F&I
- Finance and insurance. The office where contracts are signed and products like service contracts, GAP and maintenance plans are offered.
- First pencil
- The first set of numbers (price, trade, down payment, monthly payment) shown to a customer.
- Four-square
- A worksheet that shows price, trade value, down payment and monthly payment in four boxes. Some stores still use it; many don't.
- Front-end gross
- Profit on the vehicle itself: selling price minus the dealership's cost and pack, plus or minus the trade.
- GAP coverage
- A product that covers the difference between what's owed on a loan and what insurance pays if the vehicle is totaled.
- Green pea
- A brand-new car salesperson in their first weeks or months on the floor.
- Holdback
- Money the manufacturer pays back to the dealer after a new vehicle is sold, usually a percentage of its price. Not normally part of a salesperson's commission.
- Internet lead
- A shopper's inquiry submitted online through the dealer's website or a third-party site.
- Lay-down
- A customer who buys with little or no negotiation.
- Mini
- A flat minimum commission paid on a deal with little or no gross profit.
- Negative equity / upside down
- When a customer owes more on their vehicle than it's worth.
- Orphan owner
- A customer whose original salesperson no longer works at the dealership. A great source of repeat business.
- Over-allowance
- Showing a trade value higher than the trade's ACV, usually to make a deal work. It reduces front-end gross.
- Pack
- An amount added to a vehicle's cost before commission is calculated, which lowers commissionable gross.
- Pencil
- The numbers presented to a customer. “Penciling a deal” means working up those numbers.
- Phone-up
- An inbound call from a shopper about a vehicle. The goal is to set an appointment.
- Rate markup / reserve
- Profit the dealership earns when a loan's rate is higher than the lender's buy rate.
- Road to the Sale
- The step-by-step sales process: greeting, fact-finding, walkaround, demo drive, trade, first pencil, close.
- Service lane / service drive
- Where service customers drop off their vehicles. Salespeople prospect there for customers ready to trade.
- Spiff
- A small cash bonus for selling a specific vehicle or product.
- Split deal
- A deal shared between two salespeople. Units and commission are usually split in half.
- Spot delivery
- When a customer takes the vehicle home before the financing is finalized.
- Stips (stipulations)
- Documents a lender requires before funding a loan, like proof of income or residence.
- T.O. (turnover)
- Handing a customer to a manager or another salesperson to help close the deal.
- Unwind
- When a sale is reversed, often because financing on a spot delivery fell through.
- Up
- A customer on the lot. The “up system” rotates customers among salespeople.
- Walkaround
- The salesperson's presentation of the vehicle, connecting its features to what the customer needs.
- Write-up
- The paperwork that starts a deal: customer info, vehicle, trade and the customer's offer or commitment.
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