Hi, I’m New Here

Green Pea: New, inexperienced salesperson.

Gross: Gross profit on a vehicle sale; the calculation can vary, but generally is the difference between the vehicle cost and its sale price.

Hazcom: Hazardous substance communication, such as labeling, SDS inventory, etc.

Hoopty: The single greatest term ever coined for a POS vehicle (see “Sled” below)

House Deal: A vehicle transaction involving an employee, family, or friend, usually making very little profit.

Hybrid: A vehicle with a gasoline engine that charges an electric batteryused for propulsion.

ITPP (Identity Theft Protection Plan): Required to protect consumers’ (and employees’) private information.

Juice: Interest paid by a consumer who finances a vehicle purchase.

LIFO/FIFO: Last In, First Out or First In, First Out; choice of accounting method that can result in tax deferment or liability for dealerships.

Locate: A vehicle that a customer is interested in that needs to be located in another dealer’s inventory and acquired through a dealer trade.

Lockout/Tagout: Practices and procedures to safeguard employees from the unexpected energization or startup of machinery and equipment, or the release of hazardous energy during service or maintenance activities (putting a lock and name tag on equipment taken out of service for maintenance or repair).

Mini: the smallest commission a salesperson can earn on a sale presented as a flat amount, sometimes called a flat.

MLA: Military Lending Act.

MMR: Manheim Market Report

Monroney Sticker: (Price Labeling Law) Federally required window sticker from automaker. Describes car, origin, standard equipment, optional equipment, MSRP, taxes, destination charge, EPA gas mileage estimates, and insurance rating.

MSRP: An acronym for Manufacturer’s Suggested Retail Price.

NPPI (Non-public personal information): Personal information that is protected by law.

Note: Another term for a retail installment sales contract, such as used in the phrase “holding the note.”

Negative Equity: Circumstance where a customer owes more on their vehicle than it is worth. Also referred to as under water or upside down.

OEM: Original equipment manufacturer (the auto manufacturer or its contracted supplier)

OFAC (The Office of Foreign Asset Control); a department of the U.S. Treasury that enforces economic and trade sanctions against countries and identifies groups of individuals or entities (SDNs, Specially Designated Nationals) involved in terrorism, narcotics and other disreputable activities; dealerships must check the list when transacting business and decline sales to such persons or entities. Civil Penalties range from $11,000 to $1 Million per violation; criminal penalties are possible as well.

Out of Trust: Failing to pay-off a floorplan loan when a vehicle is sold from floor-planned inventory

Pack: The amount of marketing and overhead costs allocated to a vehicle in calculating salesperson commission. For example, a vehicle is sold for $2,500 gross profit; however, because it has a $500 pack, the salesperson’s commission is calculated on a profit of $2,000.

PAGA: Private Attorney General Actions; Statutory authority allowing a lawsuit to be commenced by private individuals instead of a government agency.

Paper: Another term for a retail installment sales contract, such as used in the phrase “holding the paper.”

Payment Packing: Unlawful, deceptive practice of burying extra services and products in the payment to increase the cost, that the consumer may not be aware of and hasn’t agreed to purchase, or has been told these services or products were “free”

PDI: Pre-Delivery Inspection

Plug-in Hybrid or PHEV: A hybrid that can also be recharged by plugging it into an electrical source, extending the range available on just electricity.

PMA: See AOR.

Point: Each separate franchise store; e.g., a Ford point. Also a term used to refer to a single percent of interest rate (e.g., the interest rate was increased by two points).

Power Booking: A discrepancy between the reported specifications and options associated with a vehicle and the actual equipment on the vehicle resulting in the vehicle being over-valued. Intentionally misrepresenting such specifications or options may result in liability for fraud on lender. If intentional, usually done in order to qualify a customer for financing.

PPE: Personal protective equipment, such as goggles, gloves and respirators

Privacy Notice: A document that reflects a dealer’s policies regarding sharing NPPI; model forms available at www.federalreserve.gov

RDR: Retail Delivery Registrations

Reg M: FTC regulation involving leased vehicles that expands upon the Consumer Leasing Act (CLA).

Reg Z: FTC regulation involving the sale of vehicles that expands upon the Truth-In-Lending-Act (TILA).

RISC or RIC: Retail installment sales contract. Also referred to as a “note” or “paper.”

Risk Based Pricing Rule: Federal law that requires certain disclosures to consumers who are offered credit.

RMA: Relevant market area; generally, an exclusive territory in which a competing dealer of the same linemake cannot be opened.

RO: Repair order used by the service department.

ROI: Acronym for return on investment.

Rooftop: Each physical location of a dealership group.

Sales and Service Agreement or SSA: A dealership sales and service agreement with an OEM. Also commonly referred to as the dealer agreement.

SDS: Safety Data Sheet for hazardous chemicals. These are now standardized and used to be called MSDS. Dealerships must keep an inventory and all SDS for chemicals used on site. Common area for OSHA violations and can affect handling of emergencies.

Service Contract: An agreement (contract) to perform maintenance or repair services; these are separate and distinct from warranties. Each term is regulated and should be used appropriately.

Sled: Any vehicle which, through attributes of age or condition, is less than highly desirable. Other terms include beater, bucket, clam, clunker, crate, heap, jalopy, junker, and toad.

Smog Sticker: Often included on the window sticker of a new car, giving emissions information.

Soft Pull: An inquiry on a customer’s credit that does not impact their credit score, as opposed to a “hard pull.”

SPIFF: A bonus or other form of remuneration given to salespeople for promoting sales. Some associate this term as an acronym for Sales Program Incentive Funds.

Spot Delivery or Spot: Immediate vehicle delivery prior to financing approval, which can have compliance complications. States are clamping down on this practice. See also Yo-yo sales.

SSI: Sales Service Index; goes by various names and is used extensively by OEMs to gauge dealer performance in delivering quality vehicle purchasing experience to customers.

Sticker: When used as a pricing term, means MSRP.

Stop Drive: Issued by NHTSA and/or the manufacturer for a serious safety issue, indicating those models must be grounded.

Stop Sell: Issued by the manufacturer to its dealers for a recall issue that may or may not be a serious safety issue, in instances where a fix or parts may not be readily available. State law varies on reimbursement to dealer, as do OEM policies.

Straw Purchase or Lease: Borrower/ lessor is a different person than the intended user of vehicle, such as grandmother “buying” a vehicle, but her grandson is the sole intended user the car.

Subprime Loans: Higher interest rate loans for those with riskier credit/ lower scores who don’t qualify for normal rates

Sweepstakes and Promotions: Sales programs that offer an opportunity for consumers to win something of value. Exercise care to avoid FTC prohibitions, gambling statutes, and “lottery” prohibitions. Some states require posting a bond in advance for these promotions.

TCPA: Telephone Consumer Protection Act; there is a federal version, and many states have similar laws.

TILA or Truth in Lending Act: Implemented by the Federal Reserve Board through Reg Z.

TO: Turn over, often the process of a salesperson sending a reluctant customer to F&I or the Sales Manager.

Trunk Money: Factory to dealer incentives that are not publicly advertised.

TSR (Telephone Sales Rule) and Telemarketing Sales Act: Federal law regulating telemarketing and faxing ads. The CAN-SPAM Act of 2003 regulates email marketing.

TT&L: Acronym for tax, title, and license.

Twenty Group: A general term for programs where groups of dealership leaders or managers are formed in order to meet, exchange ideas, identify best practices, and explore opportunities for improving dealership performance. Oftentimes the groups will have certain common characteristics, such as market geography, population size, or demographics.

UDAP (Unfair and Deceptive Acts and Practices): Laws enacted in in many states that apply to consumer transactions and advertising; also called MINI-FTC Acts; sometimes referred to a PAGA (see above).

Up: A potential customer who appears at the dealership without a prior appointment.

Upside Down: When the customer owes more than the value of their current vehicle. If the negative equity is significant, they may be “buried” or “tanked” to the point where they can’t reasonably trade it in and finance another purchase.

Waiter: Customer waiting in dealership

We-owe: The dealership owes something to the customer (floor mats, hitch, touch up paint, dent fix).

Yo-yo Sales: Derogatory term used to describe dealership sales practice of spot deliveries (or conditional sales) that are later unwound due to “credit denial” and result in higher interest rate or otherwise more expensive deals when the consumer returns to the dealership (like a yo-yo).

ZEV (Zero Emission Vehicle): Electric or hydrogen-powered.

Eric Baker is a private-practice attorney operating Wisconsin Dealer Law in Madison, Wisconsin. Eric represents automobile and equipment dealers in franchise litigation, and a variety of business and consumer litigation, in administrative proceedings, state and federal courts, arbitrations, and appeals. Eric also advises clients in litigation avoidance, and state and federal regulatory compliance, and teaches compliance seminars for dealer groups. Eric also represents dealerships in buy/sell transactions and succession planning.

The terms listed above, and industry jargon, generally, should never be assumed to be monosemy (the property of having only one meaning). Lawyers are well trained in this concept, but it is good to remember that the definition of any term may depend on how an attorney, contracting parties, or a legislative body defined that term in an applicable contract, statute, or regulation.

Each May, NMEDA champions the efforts to raise awareness for the auto mobility industry via National Mobility Awareness Month (NMAM). As we gear up for this year’s celebration, we want to make sure you mark your calendars and carve out some space on your social media and networking plans to spread the word on NMAM this May!

Stay tuned for our toolkit and more information. www.MobilityAwarenessMonth.com