Sales & CRM
- DMS (Dealer Management System)
- The core software a dealership runs on: inventory, customers, deals, accounting, and reporting in one system. It’s the operational hub the rest of the dealership’s tools connect to.Learn more
- CRM (Customer Relationship Management)
- The system that tracks leads and customers through the sales funnel, capturing inquiries, logging follow-ups, and routing opportunities so no prospect falls through the cracks.Learn more
- Lead
- A potential buyer who has shown interest by submitting a website form, calling, or walking in. Leads are worked through statuses (new, engaged, appointment set, sold/lost) until they convert or close out.
- Spot delivery
- Letting a buyer take the car home before financing is fully approved (“on the spot”). It carries unwind risk if the loan isn’t funded, so it’s tightly regulated in many states.
- Trade-in / ACV
- A vehicle a customer trades toward a purchase. ACV (Actual Cash Value) is the wholesale value the dealer assigns it, distinct from the allowance shown on the deal, which may be inflated and offset elsewhere.
- Desking
- Structuring and presenting a deal’s numbers (price, trade allowance, taxes, fees, down payment, and monthly payment) to the customer, usually back and forth until terms are agreed.
- Buyer’s order
- The binding summary of a vehicle sale: price, trade, fees, taxes, and total. The “deal jacket” is the folder (paper or digital) holding the buyer’s order and every other document for that deal.
- Up
- Dealer slang for a prospective customer who arrives ready to be worked; “a fresh up” is a new walk-in. Tracking ups and their close rate is a core CRM metric.Learn more
- BDC (Business Development Center)
- The team, or the single person at a small lot, that answers inbound leads and calls, follows up, and sets appointments so salespeople spend their time with customers who show up.Learn more
- ADF lead
- Auto-lead Data Format, the XML layout marketplaces and lead providers use to send a shopper’s contact details and the vehicle of interest to a dealer’s CRM, usually by email or to a web address.Learn more
- Lead routing
- The rule that decides which salesperson gets a new lead. Round-robin gives each person a turn; workload-based routing sends it to whoever has the fewest open leads.Learn more
F&I & financing
- F&I (Finance & Insurance)
- The dealership office that arranges financing and sells protection products (GAP, service contracts) after the sale price is agreed. “Back-end” gross comes from F&I; “front-end” gross is the vehicle margin.Learn more
- BHPH (Buy Here Pay Here)
- A model where the dealer finances the buyer in-house and collects the payments directly, instead of routing the loan to a bank or lender. The dealer carries (and services) the note.Learn more
- RIC (Retail Installment Contract)
- The financing agreement between buyer and dealer for a car paid over time. It must disclose the amount financed, APR, finance charge, and total of payments under federal Truth in Lending (TILA).
- TILA (Truth in Lending Act)
- The federal law requiring clear, standardized disclosure of credit terms (APR, finance charge, amount financed, and total of payments) in the familiar boxed format on a retail installment contract.
- GAP (Guaranteed Asset Protection)
- An optional product that covers the “gap” between what a buyer still owes and what insurance pays if the vehicle is totaled or stolen while underwater on the loan.
- VSC (Vehicle Service Contract)
- An extended-warranty-style product that pays for covered repairs after the factory warranty ends. A common F&I back-end product, sold per-deal.
- Amortization
- How a loan is paid off over time: each fixed payment splits into interest on the remaining balance and principal, with the balance reaching zero at the final payment.Learn more
- Front-end vs. back-end gross
- Front-end gross is profit on the car itself (sale price minus cost, pack, and discounts). Back-end gross is earned in the finance office after price is set: rate reserve, service contracts, GAP, and protection products.Learn more
- Buy rate & dealer reserve
- The buy rate is the interest rate a lender approves for the buyer. If the contract is written above it, the spread is the dealer’s reserve (participation), a common source of back-end gross that is subject to fair-lending rules.
- APR vs. interest rate
- The interest (note) rate is the cost of borrowing the principal. The APR is that rate plus lender fees, so it is usually higher and, under the Truth in Lending Act, is the standardized figure for comparing loan offers.Learn more
- Simple vs. precomputed interest
- Most U.S. auto loans use simple interest, which accrues on the actual remaining balance, so paying early saves interest. Precomputed interest is figured up front and added to principal; the Rule of 78s is a precomputed method that front-loads the finance charge.Learn more
- Negative equity
- Being “upside down”: owing more on a loan than the vehicle is worth. Because principal pays down slowly early while cars depreciate fast, buyers can be upside down for much of a long loan.
- Balloon payment
- A large one-time payment due at the end of a loan term (generally more than twice the regular payment). It lowers the monthly payment but leaves a lump sum at maturity, unlike a fully-amortizing loan that ends at $0.
- Subprime
- A credit tier for borrowers with lower credit scores, who are offered financing at higher rates to offset risk. “Deep subprime” is the lowest tier and a core market for many BHPH and independent dealers.Learn more
- Adverse action (ECOA)
- Under the Equal Credit Opportunity Act, when a credit application is denied or approved on worse terms, the dealer/creditor must give the applicant a notice stating the principal reasons, known as an adverse-action notice.Learn more
- Pickup payment
- A deferred part of the down payment that the buyer agrees to pay on a set date after delivery. It is scheduled and tracked separately from the regular loan payments.Learn more
- Payoff quote
- The amount that pays a loan in full on a given date: the remaining principal plus interest accrued to that day and any unpaid fees. On a simple-interest loan it changes every day.Learn more
- NSF payment
- A payment the bank returns for non-sufficient funds. The payment is reversed on the loan, the balance goes back up, and the contract may allow a returned-payment fee.Learn more
- Promise to pay
- A past-due borrower’s commitment to pay a stated amount by a stated date. Collectors record it and follow up when the date passes, and a broken promise moves the account up the queue.Learn more
Inventory & operations
- VIN (Vehicle Identification Number)
- The 17-character code that uniquely identifies a vehicle and encodes its build specs (year, make, model, engine, plant). Decoding it pre-fills inventory and confirms exactly what a car is.Learn more
- Floor plan
- A revolving line of credit a dealer uses to finance inventory. Interest accrues daily per vehicle until it sells, so floor-plan cost is a core part of a unit’s holding cost.Learn more
- Curtailment
- A scheduled partial principal paydown a floor-plan lender requires after a vehicle has been floored for a set period (e.g. 10% at 90 days), reducing the balance interest accrues on.
- Holding cost
- What it costs to keep a vehicle in inventory each day it’s unsold: primarily floor-plan interest, plus lot overhead. It erodes gross profit the longer a unit ages.Learn more
- Reconditioning (recon)
- The work done to make an acquired vehicle retail-ready: detailing, mechanical repairs, tires, etc. Recon cost is subtracted from gross to find a unit’s true net profit.
- Pack
- A fixed amount a dealership charges each unit to cover overhead (rent, utilities, admin) before figuring commissionable gross. It varies by store.
- Inventory turn
- How many times a dealer sells and replaces its inventory in a period. Faster turn means less holding cost and fresher stock; “days to sale” (or age) measures the same idea per unit.
- Doc fee
- The documentation (or “processing”) fee a dealer charges to prepare and file paperwork on a sale. Some states cap it; it’s part of the out-the-door price.Learn more
- Out-the-door price
- Everything a buyer actually pays to drive away: vehicle price plus sales tax, doc fee, and title/registration, minus trade-in credit and rebates. Almost always higher than the advertised price.Learn more
- Wholesale vs. retail
- Wholesale is the dealer-to-dealer (auction) value of a vehicle; retail is the consumer asking price. The spread, minus recon and holding cost, is where used-car gross comes from.
- Days’ supply vs. days to sale
- Days’ supply measures the whole lot: how many days of sales the current inventory represents. Days to sale (age) is per-unit: how long a specific car has been in stock. Both track how fast you turn.
- PVR / GPU
- Per-Vehicle Retail (a.k.a. Gross Per Unit) is the average gross profit per car retailed. A headline benchmark for a store’s pricing power; among public retailers it ran near $1,500 on used in 2025.Learn more
- Advance rate
- The share of a vehicle’s value a floor-plan lender will lend against it, often 95-100% of cost on new units and roughly 75-90% on used. Independents usually sit at the lower end.Learn more
- Sold out of trust
- Selling a floored vehicle without immediately paying off its floor-plan balance. Because the inventory is the lender’s collateral, it’s a serious default that floor checks are designed to catch.Learn more
- Frontline ready
- A unit that has finished reconditioning, photography, and pricing and is ready to sell. Time-to-frontline is dead time: the car incurs holding cost while it waits, before it can earn.
- Work order
- The list of reconditioning jobs on one vehicle: what needs doing, who does each job, the estimate and the actual cost. It shows how long the car has been in recon and whether it is running over budget.Learn more
- 360 spin
- A set of exterior photos taken around a vehicle and shown as one view a shopper can drag to turn the car. It needs evenly spaced angles taken from a consistent distance and height.Learn more
- VIN check digit
- The ninth character of a 17-character VIN, calculated from the other sixteen. When a VIN is mistyped or misread the check digit usually no longer matches, which is how software catches the error.Learn more
Accounting & books
- Chart of accounts
- The list of every account a business posts to, grouped as assets, liabilities, equity, income, cost of goods sold and expenses. A dealership’s chart separates vehicle inventory, floor plan payable, sales tax payable and finance receivables so each can be tracked by itself.Learn more
- Journal entry
- A dated record of debits and credits that always balance. A car sale posts several lines at once: the sale, the cost of the car leaving inventory, the tax owed to the state, and the money received or still due.Learn more
- General ledger
- The complete record of every journal entry, account by account. Financial statements are read from it. A DMS may keep its own ledger, post to an outside one such as QuickBooks, or do both.
- Profit and loss statement (P&L)
- A report of income, cost of goods sold and expenses over a period, ending in net income. For a dealer the lines that matter most are gross profit on vehicles, F&I income and overhead.Learn more
- Balance sheet
- A snapshot of what the business owns and owes on one date: assets such as cash, vehicle inventory and loans receivable, liabilities such as floor plan balances and sales tax payable, and the owner’s equity.Learn more
- Cost of goods sold (COGS)
- What the vehicles you sold cost you: the acquisition cost plus reconditioning and other costs added to the car. It leaves inventory and becomes an expense in the period the car is sold, not when it was bought.
- Accounts payable
- Bills the dealership owes but has not paid yet, such as a vendor’s invoice for recon work. The cost is recorded when the work is done and cleared when the bill is paid.
- Bank reconciliation
- Matching each transaction on the bank statement to an entry in the books and explaining any difference, so the book balance of cash can be trusted. It catches missed deposits, duplicate entries and bank errors.
- Management-basis vs. GAAP statements
- Management-basis statements are prepared for running the business and may simplify some rules, for example counting loan interest when it is collected. GAAP statements follow formal accounting standards and are what an audit or a lender’s covenant usually requires.Learn more
Titling & compliance
- Title / titling
- The legal document of vehicle ownership. After a sale the dealer prepares the title application and transfer paperwork for the state DMV, the titling process that registers the new owner.Learn more
- Lienholder
- The bank, credit union, or finance company that holds a security interest in a financed vehicle. The lien is recorded on the title until the loan is paid off.
- Odometer disclosure
- A federally required statement of a vehicle’s mileage at sale (and whether it’s actual, exceeds mechanical limits, or not actual). Required on most transfers to combat odometer fraud.
- OFAC screening
- Checking a buyer against the U.S. Treasury’s sanctions (SDN) list before completing a sale. A potential match must be reviewed and cleared; dealers are expected to screen and keep records.Learn more
- Red Flags Rule
- An FTC rule requiring dealers (as creditors) to have an identity-theft prevention program: reasonable procedures to detect and respond to “red flags” of identity theft during financing.Learn more
- FTC Safeguards Rule
- An FTC rule requiring dealers to protect customer financial information with a written security program: a designated qualified individual, risk assessments, employee training, and incident response.Learn more
- NMVTIS
- The National Motor Vehicle Title Information System, a federal database of title, brand (salvage/junk), and odometer data used to verify a vehicle’s history and prevent title washing.
- Vehicle history report
- A paid report (e.g. Carfax or AutoCheck) compiling a vehicle’s title, accident, service, and odometer records. Distinct from a free VIN decode, which shows build specs but not history.Learn more
- FTC Used Car Rule (Buyers Guide)
- The FTC rule requiring a “Buyers Guide” window sticker on most used cars offered for sale, disclosing whether the vehicle is sold “As-Is” or with a warranty, and the major systems to inspect.Learn more
- As-is sale
- A sale with no dealer warranty: the buyer accepts the vehicle’s condition and assumes the cost of any repairs after purchase. Must be disclosed on the FTC Buyers Guide; some states restrict or ban as-is sales.
- Branded title
- A title permanently marked with a condition such as salvage, flood, junk, rebuilt, or lemon-law buyback. Brands follow the vehicle across states and sharply affect value; they’re reported through NMVTIS.
- Temporary tag
- A short-term registration that lets a buyer legally drive a just-sold vehicle while the permanent title and plate are processed. Issuance rules and durations are set by each state.
- Secure power of attorney
- A controlled, serialized power-of-attorney form (e.g. Florida’s HSMV 82995) used when the dealer signs odometer and title paperwork on the buyer’s or seller’s behalf. It is tightly regulated to prevent odometer fraud.Learn more
- Lien release
- The document a lender provides when a loan is paid off, releasing its security interest so the title can be cleared. Required before a clean title transfers to the next owner.
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