Used Car Jargon You Need to Know

While the hunt for your next pre-owned vehicle can be an exciting time, it can also be an intimidating experience -- especially if you are naive to the whole used car buying process and don't fully understand the pricing jargon salespeople are using. 

Bear in mind that as a car buyer, YOU are always the one in control and you should never allow a car salesperson to swindle you into making a decision you're not 100% certain about. By taking the time to do a bit of research beforehand, you'll be able to navigate through the process with confidence and ease.

You not only need to be firm in knowing exactly the type of vehicle you want and what its true market value is, you'll also want to familiarize yourself with the pricing jargon being used when it comes down to the negotiation process. Remember that no price is set in stone when it comes to the purchase of a vehicle.  

By familiarizing yourself with the following used car pricing terminology and knowing how to use them, the salesperson will realize you're not *that person* who's going to be easily taken advantage of, putting you in a better position to play ball and pay the price you deserve for your next vehicle.
 

Used Car Pricing Jargon
 

• Asking Price
  This is the price at which the vehicle is being offered for sale by the seller who will do their best to make a profit. Note this price is subject to bargaining; it is simply the amount the seller is asking for the car, and since the seller knows an effective negotiator will try lowball the asking price, they'll typically price this higher than what it's actually worth since it serves as the starting point for negotiation. 

• Dealer Price
  Also known as the dealer's retail price, this is typically the advertised price you'll see pasted on a car's windshield in big, bright numbers when you're checking out vehicles on the lot. It's similar to the Asking Price in that it's the highest potential price you'd be paying for the vehicle, so don't fall for it if the dealer tries to push this or offers you a couple thousand dollars below it as a sales tactic. 

• Wholesale Price
  The wholesale price is what the dealer actually paid for the car, or rather the value that a dealer would pay to purchase it from an auto manufacturer. If you were to parallel this with new-car pricing, it would be equivalent to the vehicle's invoice price. In the case of trade-in vehicles, it represents the price a dealer would pay to purchase the vehicle from a dealer auction. If you're buying your car from a private seller, you won't encounter this term. 

• Canadian Black Book Value
  Canadian Black Book provides used car prices for wholesales and residual values for dealerships and is a trusted source for Canadians to find new and used car values on a vehicle's Future as well as its Average Asking Price, so you'll definitely want to refer there when you're researching the type of vehicle you're interested in and figuring out what the appropriate asking price should be. Note that the CBB price is not set in stone, it is just one of many pricing guides out there. You can always counter the CBB price if you have the right justification to do so. 

With respect to different pricing guides, you'll want to leverage the information you find about your prospective vehicle as an approximation -- not as the be-all and end-all for pricing.

Take all the time you need during the negotiation process and make sure you ask for/write down all the different prices from various sellers for comparison, in addition to asking for the "out-the-door" price which factors in sales tax and other fees.