Car Sales Terminology

When it comes to buying a new or used car, you may sometimes wonder if the Sales Executive is talking a different language; especially if you overhear them talking to their colleagues.

We’re going to take a look at the weird and the wonderful terminology, in alphabetical order and see what it actually means.

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Business Manager

The Sales Executive is there to help you selected and spec your perfect car, once you’re looking at ways to finance your purchase, you will be introduced to the Business Manager.

Bit of a meaningless title, but the Business Manager in a dealership is the person who can show you different ways to fiancé your car and help you decide if you need any further products such as GAP insurance.

Clocked or Clocking

This is the highly unscrupulous process of turning back the clock on a cars odometer, that’s the ‘clock’ that records how many miles the vehicle has done. It makes the car worth more, by making it appear to have done less miles than it actually has. Clocking is illegal and not a practice that any reputable dealership would ever condone.

Deposit Contribution

This is offered by the manufacturer when the customers buys a car, usually new, using the manufacturer’s finance. It can be offered on different types of finance agreement, including PCP and HP. This form of discount from the manufacturer is only available when you choose to purchase the vehicle using the manufacturer’s finance.


Vehicles decrease in value month on month and this is known as deprecation.


Dealerships use demonstrator vehicles to allow potential customers to test drive the model they’re interested in; they are also used as a company car by members of staff. They can be a great used buy as they have been well cared for, often well spec’d, done low mileage and save money on the same model when new.

Remember an ex-demo will have the dealership as the first owner on the V5 logbook.


GAP is actually GAP Insurance. It’s a fact that whichever car you choose, it will depreciate in value and if you have an accident where your vehicle is written-off, you may be shocked at how much your insurance company is prepared to pay out. This is where GAP insurance comes in, it bridges the gap, between what your insurance pays out and the balance left to settle your finance agreement or replace your car.


F&I stand for finance and insurance and covers the way you fund the purchase of your vehicle and any extra insurance products you may want to take out. The Business Manager is sometime referred to as the ‘F & I Guy/Girl’.

FSH - Full Service History

Refers to a used car having a fully stamped Service Book; proving that it’s been serviced in line with the manufacturer’s service schedule.

FDSH - Full Dealer Service History

This is the ultimate for a used car and shows that it has not only been serviced in accordance with the manufacturer’s schedule, but that all servicing has been carried out by a franchised main dealer for the brand.

mind the gap

PCP – Personal Contract Plan also known as Balloon Finance

This type of finance is becoming more and more popular. If you like a new car every 2 or 3 years and want to keep your monthly payments down then a PCP could be the solution.

It allows you to drive the car for the period of the contract, with the option to purchase, by paying the balloon payment, at the end of the term, keeping monthly payments lower, as you’re only paying for the use of the car for the length of the contract.

You don’t have to make the final balloon payment, you can start again with a new car and a new PCP or hand the keys back.


The current vehicle which you own, and are looking to exchange, in part payment for your new vehicle.

HP – Hire Purchase

The oldest of vehicle finance, a Hire Purchase agreement means you are buying the vehicle via monthly instalments and will own the vehicle at the end of the agreement. Works well for people who like to keep their car for a long time.


Leasing a car is essentially the same as long-term rental. You make an up-front payment, usually of between 3 and 6 times the monthly payment and then you make a monthly payment, which is in effect your payment for the use of the vehicle.

When the lease ends you hand the vehicle back, you need to take care to keep to the agreed mileage and keep the vehicle in good condition.

Prep Costs

When you’re buying a used car from a reputable used car dealer or franchised main dealer, then there will be prep costs involved. This is the sum of money the dealership has spent on preparing the vehicle to be ready for sale; it can include servicing. MOTing, removing dents and scratches etc.


Franchised car dealers have to adhere to standards and targets set by the brand they represent. During March and September when the registration plate number change the sales targets set for dealers can be extremely high.

Dealers have to meet these targets in order to earn manufacturer bonuses; without these bonuses some dealerships will make little or no profit and so, in order to reach the targets needed to achieve the bonus, dealers will sometimes need to pre-register vehicles in their own name.

These registrations count toward the target, allowing the dealer to achieve bonus. These are then sold as pre-registered cars, in essence they are brand new, but have the dealership as the first owner on the V5.

Residual Value

This is the sum of money a vehicle is worth after depreciation. People will talk about vehicles having good or bad residual values, dependent upon how much of their original cost they retain after, 1, 2 or 3 years.


A car, which has been stolen and then given the registration number of another vehicle; usually one that’s been written off. This is something you need to be aware of if buying privately or from a trader who you don’t know. If you’re unsure pay for an HPI check and make sure the chassis number tallies with the registration number.

SIV - Stand In Value

This applies to a used car and is what the car has cost the dealer, what it ‘stands at’. If they sold at this price, there would be no profit in the vehicle.

Volkswagen workshop interior view with car on ramps


The specification, including extras which a car has, for example, heated seats or part leather interior, Sat Nav etc.


Means the same as part-ex.


Sometimes dealers need to sell specific cars; it may be that the car is over-age or has a manufacturer bonus on it, thus they will incentivise a customer to switch to the car, usually by giving a discount.

Upside Down

If you’re car loan is upside down it means that you owe more on the loan than the car is currently worth. This is what can happen if you have an accident where your vehicle is written off early into the finance agreement; due to vehicle depreciation, you may owe more on the finance agreement than your car is worth. See GAP insurance.



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