Glossary
The dealer alphabet, plainly.
44 terms across sales, F&I, service, DMS, compliance, marketing, and voice AI. We update quarterly. If a term is missing, email us.
A
- Adverse ActionCompliance
- Required notice to a customer when their credit application is denied. Federal Equal Credit Opportunity Act.
- APR— Annual Percentage RateF&I
- The yearly cost of a loan including interest and fees. Lender publishes a base rate; dealer may mark it up within state-allowed limits.
B
- Back-End GrossF&I
- Profit from F&I products (warranty, GAP, etch, paint protection) and finance reserve, on top of the front-end vehicle margin.
- Be-backSales
- A customer who left without buying and returns later. Industry says ~25% of be-backs close; most dealers don't track them well enough to know.
- BHPH— Buy-Here-Pay-HereMarketing
- Dealers who finance customers in-house, often subprime. Higher payment volume, higher default risk, higher per-deal margin.
- Buy RateF&I
- The interest rate the lender offers the dealer. Dealer may sell to customer at a higher "sell rate" — the spread is "reserve."
C
- Cap Cost— Capitalized CostF&I
- The negotiated price of a leased vehicle. Lower cap = lower payment.
- CloserSales
- The senior salesperson or manager who steps in late in a deal to handle objections and finalize the sale.
- CostDMS
- What the dealer paid for a vehicle. Includes wholesale price + reconditioning + transport. Determines floor for pricing decisions.
- CPL— Cost Per LeadMarketing
- How much the dealer pays per lead from a given source. AutoTrader: $25-50. Cars.com: $20-45. CarGurus: $15-35.
- CRM— Customer Relationship ManagementDMS
- Software that tracks leads, customers, and follow-ups. Often a separate system bolted onto the DMS.
- CSI— Customer Satisfaction IndexService
- Survey-based score of customer happiness. OEM uses it to determine warranty reimbursement rates and bonuses.
- Customer Close Rate— CCRSales
- Percentage of opportunities (leads or showroom visitors) that result in a sale. Industry average ~17–22%.
D
- Days SupplySales
- How many days it would take to sell current inventory at current sales pace. Healthy: 45–75 days. Aged 90+ becomes a problem.
- Dealer ReserveF&I
- The dealer's profit on financing — the spread between buy rate and sell rate paid up-front by the lender.
- DeskingSales
- The process of building a deal worksheet — selling price, trade, taxes, fees, payment options. Done at "the desk" with a manager.
- DMS— Dealer Management SystemDMS
- The core software that runs a dealership: inventory, accounting, F&I, service. CDK and Reynolds dominate; Tekion and modern challengers are growing.
- Doc FeeF&I
- A flat fee for processing paperwork. State-capped in most jurisdictions ($75–$995). Florida cap: $999.
E
- Effective Labor Rate— ELRService
- Total labor revenue ÷ hours worked. Often lower than published rate due to discounts and warranty work.
F
- F&I— Finance & InsuranceF&I
- The department that arranges financing and sells aftermarket products (warranty, GAP, etc.). Where most dealer profit lives.
- Floor PlanSales
- Inventory financing — the bank loan a dealer uses to buy vehicles to sit on the lot. Interest accrues daily, which is why aging matters.
- Front-End GrossF&I
- Profit on the vehicle itself — selling price minus dealer cost. Often razor-thin on new cars; better on used.
G
- GAP— Guaranteed Asset ProtectionF&I
- Insurance that covers the gap between what you owe and what insurance pays in a total-loss claim. ~$700 typical.
H
- HandoffVoice AI
- When the voice agent transfers the caller to a human. Should preserve full context so the human doesn't restart.
I
- Intent ClassificationVoice AI
- The agent's real-time labeling of what the caller wants — test-drive, service, financing, etc. Drives routing decisions.
M
- Money FactorF&I
- The lease equivalent of an interest rate. Multiply by 2400 to get APR roughly.
O
- OEM ComplianceDMS
- Manufacturer-mandated processes — recall notifications, customer surveys, warranty submission. Failure = lost OEM perks.
- OTD— Out The DoorMarketing
- The total price the customer pays — selling price + tax + fees. "OTD pricing" is the transparent way to advertise.
P
- PackF&I
- Internal cost added to a vehicle by management before commission is calculated. Reduces salesperson commission base.
- PencilSales
- A specific deal proposal handed to the customer, usually with payment options. "Throw a pencil" = present a deal structure.
- Privacy NoticeCompliance
- GLBA-required disclosure to customers about how the dealer handles their data. Federal Gramm-Leach-Bliley Act.
- PVR— Per-Vehicle RetailF&I
- Average gross profit per vehicle sold. Industry healthy: $3,000–$4,500 combined front + back.
R
- Red Flags RuleCompliance
- FTC rule requiring identity verification on credit applications to prevent fraud.
- RO— Repair OrderService
- The work-order document for a service visit. Tracks what was wrong, what was done, parts used, hours billed.
S
- ShowedSales
- A lead status meaning the customer physically came to the dealership for their appointment. Showed > Lost > Sold is the funnel.
- Stip— StipulationF&I
- Lender-required document before funding. Pay stub, proof of insurance, references. Stips slow down deals.
T
- T.O.— Turn-OverSales
- When a salesperson hands the customer to a manager (often the closer) for the next step.
- Tech TimeService
- Hours a technician is actively working on cars vs. "down time" (waiting for parts, training, etc.). Industry target: 80–90%.
- Truth in Lending— TILACompliance
- Federal law requiring clear disclosure of finance terms — APR, total finance charge, total of payments.
- TTS / STT— Text-to-Speech / Speech-to-TextVoice AI
- The two halves of a voice loop. Quality of both determines whether the caller knows they're talking to an AI.
U
- UpSales
- A potential buyer. "It's your up" = "this customer is yours to work."
V
- Voice AgentVoice AI
- AI that handles phone calls in real time — listens, responds, takes actions like booking. Different from a chatbot, which is text-only.
W
- Walk-InMarketing
- A customer who showed up to the dealership without scheduling. Highest-intent and highest close-rate of any lead source.
- Warranty ReimbursementService
- When the OEM pays the dealer for warranty repairs. Rates negotiated annually, often well below customer-pay rates.