Glencoe Secondary Marketing Essentials DECA Connection Glossary

Vehicles and Petroleum Marketing

Glossary

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

abrasive wear Wear caused by particles between two moving surfaces or by roughness on either surface.

acquisition fee A fee charged by finance companies for processing a loan.

additive Anything added to gasoline to improve car performance or fuel efficiency, or reduce smog.

add-on Any option added to a car, especially those with high profit margins and little actual value to the customer.

advertising fee A fee charged to customers by some auto dealerships to cover the cost of advertising.

airbag A supplemental safety system in vehicles that inflates to cushion an occupant during a collision.

all-wheel drive A system in which the engine powers all four of a vehicle's wheels all the time; similar to four-wheel drive.

American Society for Testing and Materials (ASTM) An organization made up of representatives from automobile and equipment manufacturers, gasoline producers, and pipeline companies, which develops specifications for gasoline.

annual percentage rate (APR) The actual interest rate a borrower will pay each year on the unpaid balance of a vehicle loan.

anti-lock braking system (ABS) Vehicle brakes that sense when the wheels are locking up or skidding and adjust to avoid a skid.

automatic transmission A gearbox that automatically matches the engine's speed to the correct gear.

automatic transmission fluid (ATF) The fluid needed to lubricate automatic, hydraulic transmissions in motor vehicles.

bait-and-switch An illegal practice by which a dealership offers a vehicle at a very low price that is not actually available, then presses a customer to purchase a more expensive vehicle.

barrel The standard unit of measure for crude oil and refined products, equal to 42 gallons.

base model The least expensive version of a certain model of vehicle, with few (or no) options.

base MSRP The suggested retail price of a vehicle without added options.

basic warranty A warranty that covers everything on the car not subject to wear and tear; also called a bumper-to-bumper warranty.

be-back A customer who leaves an auto dealership promising to return.

bitumen Asphalt or tar; a thick brown or black residue created in the refinement of crude oil.

branded product Any petroleum product sold under the name of a major oil company or other supplier.

bulk plant A facility where large quantities of refined petroleum products, such as gasoline, diesel fuel, and oil are stored, usually in a rural area.

bump An effort by an auto salesperson to get a customer to increase the amount they are willing to pay for a car.

capitalized cost The selling price of a car in a vehicle lease.

capitalized cost reduction A down payment made on a vehicle lease.

carbon residue A residue left over after oil has been exposed to high temperatures under controlled conditions.

carryover allowance A sum of money offered by manufacturers to dealers to help sell vehicles from the previous model year.

catalytic converter A part of vehicle emission control systems that converts vehicle emissions into less harmful byproducts.

certified used car A used car that the dealer has inspected and repaired to meet manufacturer's minimum specifications for certification.

cetane number A measure of how well a diesel fuel will ignite, and how much white smoke and knock will be produced.

chain retailer An independent petroleum marketing company that owns ten or more service stations.

child safety seat A seat that is attached to the seat of a car by the seatbelt that provides added protection to an infant or child in the case of an accident.

Clean Air Act of 1990 A law designed to improve air quality, particularly in specific areas identified as having higher concentrations of air pollutants.

closed-end lease A lease in which the customer returns the car at the end of the lease term without owing any additional funds, unless the car has been damaged or traveled excessive mileage.

closer A salesperson whose job it is to make sure that customers actually buy the car and close the deal.

common carrier A trucking company that delivers petroleum products from seller to purchaser, without actually buying or selling the petroleum products.

Consumer Leasing Act A federal law passed in 1976 and amended in 1996 that made specific requirements for the way leasing costs and terms must be disclosed to customers.

convertible A car in which the roof can be removed or folded back out of the way.

corrosive wear Any wear caused by a chemical reaction.

coupe A small, closed, two-door passenger car with less than 33 cubic feet of rear interior volume.

crude oil Oil that is pumped out of the ground and has not been refined in any way.

customer satisfaction index (CSI) A rating given by a manufacturer to dealerships that measures how well customers feel they were treated by the dealership when they purchased or serviced their cars.

dealer holdback A sum of money paid to a new vehicle dealer by the manufacturer to help the dealership finance the vehicle while it is on the lot, usually calculated as a percentage of the manufacturer's suggested retail price or invoice.

dealer incentive A cash award offered by a manufacturer to an automobile dealer in order to encourage dealerships to sell a certain vehicle.

dealer retail value The price for which auto dealers are selling a certain used car.

delivery and handling charge A superfluous fee sometimes charged to customers by auto dealerships for transporting and storing a car.

demo car A car used as a demonstrator by a dealership, and sometimes by salespeople for personal use.

denaturants Toxic or noxious components added fuel ethanol to make it unfit for use as a beverage.

depreciation The loss of value that a vehicle experiences over its lifetime.

derrick The visible part of an oil well; also known as a mast.

destination charge The cost of transporting a vehicle to the dealership, usually paid by the customer.

detergent A substance added to a fuel or lubricant that helps keep engine parts clean.

diesel fuel A petroleum product produced by refining crude oil, that fuels diesel engines

direct financing Financing secured from an outside source, not from the auto dealership.

disposition fee A fee charged in some leases for returning the leased vehicle.

documentation fee A fee that covers the costs of preparing the paperwork associated with a vehicle purchase.

down payment A payment that reduces the amount of a vehicle's purchase price that a customer must finance.

drivetrain The part of a vehicle that provides power, including the engine, transmission, and transaxle.

emissions Any harmful gasses, particulates, or other byproducts produced by the burning of fossil fuels, especially those that are regulated by the federal government, including carbon monoxide, hydrocarbons, and sulfur oxides.

emulsifier An additive that promotes the formation of a stable mixture, or emulsion, of oil and water.

engine deposits Sludge, varnish, and residues that accumulate inside an internal combustion engine as a byproduct of burning gasoline and of heating oil and lubricants.

engine knock The sharp, metallic sound caused by the pre-ignition of fuel as it is compressed in the cylinder; a result of burning gasoline with too little octane.

Environmental Protection Agency The federal agency charged with enforcing the Clean Air Act and other environmental protection regulations.

EPA fuel economy label A label provided on many new vehicles that specifies the gas mileage customers can expect to get from the vehicle.

extended warranty A warranty that covers a vehicle beyond the terms of the standard warranty offered by the manufacturer; also called a service contract.

F & I Finance and insurance; the area of a car dealership where customers secure financing and the dealership tries to sell them insurance and add-ons.

factory warranty A warranty provided by the manufacturer of a vehicle.

fed box A box of information on a loan or lease document that discloses pertinent information about terms and interest rates.

first pencil A preliminary estimate of monthly payments given to a customer during negotiations in an auto dealership, often inflated in order to give the dealership room to negotiate.

fossil fuel Any fuel produced in the Earth; natural gas and oil.

four-square worksheet A piece of paper with four squares drawn on it in which an auto salesperson keeps track of the purchase price, trade-in value, down payment, and monthly payment during negotiations with a customer.

four-wheel drive A system in which the driver can switch the power from two wheels to all four wheels, giving greater power, traction, and control.

friction The resistance caused by one object moving over another.

fuel ethanol Ethyl alcohol (C₂H₅OH) with impurities, including water but without denaturants.

full pop lease A lease for 110 percent of the value of a car, the most allowed by law.

gap insurance A form of insurance offered to lesees that covers the difference between what the insurance company will pay for the car and the value due to the leasing company if the car is stolen of wrecked, sometimes included in lease terms.

gas mileage A measure of the number of miles a vehicle can travel on a gallon of gasoline.

gaseous fuels Liquefied or compressed hydrocarbon gases (propane, butane, or natural gas), which can be used to power motor vehicles in place of gasoline or diesel fuel.

gasoline A refined form of petroleum used for fueling automobiles with internal-combustion engines.

gasoline/ethanol blend An automotive engine fuel containing denatured fuel ethanol in a base gasoline.

grinding Demanding the lowest possible price from the dealer on every aspect of a vehicle purchase.

high-volume dealership A large auto dealership that sells a high volume of cars, often with very pushy salespeople.

hydrocarbons Molecules consisting of carbon and hydrogen.

incentive Programs such as cash back, low-rate financing, or a discount on an option package offered by auto manufacturers to increase sales of vehicles or to reduce inventory.

invoice The total amount a dealer must pay to a manufacturer to purchase a new vehicle for its inventory.

Kelley Blue Book A publication that provides specific information about the value of vehicles, including wholesale and retail value, and the value of mileage and options.

lay down A customer who takes the first offer a salesman makes.

lead The term for tetraethyl or tetramethyl lead which is sometimes added to gasoline to improve its octane rating.

lease A financing option that allows customers to essentially rent a vehicle for a specific amount of time at a specific rate.

lease-like loan A loan with lower monthly payments and a large balloon payment at the end of the loan term.

lemon A new car that has repeated problems because it wasn't built correctly, or a used car with hidden problems the buyer didn't see at time of purchase.

lemon laws Laws passed by states to protect consumers who unwittingly purchase lemons.

license and registration fees Fees charged by state governments for vehicle registration and license plates.

light oils Gasolines and fuel oils.

lock up The point at which a car's tires start to skid.

lubricants Dense, viscous products refined from crude oil, such as motor oil, bearing grease, or machine oil.

lubrication Controlling friction and wear by introducing a fluid, solid, or plastic friction-reducing film between moving surfaces.

manual transmission A gearbox in which the driver must manually match the engine's speed to the correct gear.

mast The visible part of an oil well; also known as a derrick.

methyl tertiary butyl ether (MTBE) A common oxygenate added to reformulated gasoline.

mileage allowance The number of miles a leased vehicle can be driven under the terms of a lease without incurring additional charges.

minivan A large passenger vehicle with a sliding side door, with seating for as many as seven, and with seats that can be moved or removed to allow room for more cargo.

mom-and-pop dealership A small auto dealership, often found in a small town, concerned more with customer satisfaction than high volume.

money factor The number in a lease agreement that represents the interest rate, calculated by dividing the percentage rate by 24.

Monroney label A label legally required on every new vehicle for sale that specifies the manufacturer's suggested retail price, fuel economy, standard equipment, manufacturer-installed options, and transportation, destination, or delivery charges; also called the sticker.

monthly lease rate A portion of the monthly payment of a lease that represents the capitalized cost plus the residual value, multiplied by the money factor.

mop and glo Add-ons that add to the purchase price but add little to the value of the vehicle.

motor octane number A number that represents the ability of gasoline to resist knocking under severe operating conditions such as high speed or engine climbing.

motor oil A special kind of refined oil used to lubricate auto and truck engines.

MSRP Manufacturer's suggested retail price; also called the sticker price.

multigrade oil Engine or gear oil that that can be used over a wide temperature range.

nameplate The automobile manufacturing company whose name is on a car.

natural gas A colorless, odorless, combustible gas used for home heating and cooking and for powering electric plants.

negative-equity financing A type of financing offered to customers who are upside down in their trade-in, in which the amount still owed on the trade-in is rolled into the loan on the new vehicle.

new vehicle Any car that has not been purchased from a dealer yet.

no haggle Describes a pricing system in which dealerships do not negotiate prices with customers.

octane Describes the grade of gasoline and its resistance to engine knock.

octane requirement increase (ORI) The normal condition that occurs when an aging engine requires more octane to prevent knocking.

offshore Describes oil exploration and production at sea.

online auction A car buying process in which a buyer names a purchase price and dealers bid for the business.

online dealership An auto dealership that exists entirely online, sells the car online, and delivers it to the customer's house.

onshore Describes oil exploration and production on land.

open-end lease A lease that usually offers lower monthly payments, but specifies a value for the vehicle at the end of the lease term and requires the customer to make up the difference.

owner's manual A book provided with a new vehicle that describes its basic operation and basic maintenance requirements.

oxygenates Gasoline additives that provide additional oxygen in the combustion chamber, creating a more complete combustion of the gasoline.

petrochemicals Chemicals produced from petroleum, often as part of the refining process, such as propylene, cumene, and xylene.

petroleum Oil and natural gas; crude oil.

pickup A passenger truck with an open cargo bed in back, usually carrying two passengers but sometimes with room for four.

pipeline A system of enclosed pipes that carries gas or oil from a well to a refinery or processing plant.

preignition Any ignition of the fuel in an engine before the spark plug fires, often caused by engine deposits, that wastes power and may damage the engine.

private party market value The value of a used car based on the amount that similar vehicles are being bought and sold for by individual customers.

program car A rental car purchased by an auto dealership for its use.

pump A machine that extracts oil or gas from a well.

rebate A return of a portion of the purchase price of an automobile offered by a manufacturer to increase sales of slow-selling models or to reduce inventories.

reconditioning fee A fee charged by dealerships to clean and repair a trade-in to prepare it for resale.

reconditioning reserve A sum of money paid at the beginning of a lease term to offset any excessive wear and tear at the end of the lease, but refunded if the car is returned in good condition; also called a security deposit.

referral service An online auto buying service that refers customers to brick-and-mortar dealerships where the actual purchase is made.

refining A manufacturing process through which crude oil is turned into usable fuels and other products.

reformulated gasoline (RFG) Gasoline which is specially manufactured to reduce the harmful emissions that produce smog.

Regulation M A law that requires auto dealers to provide very detailed pricing information in leasing contracts and that simplifies lease documents.

research octane number A number that represents the ability of gasoline to resist knocking under mild operating conditions.

reservoir rock The rocks below the Earth's surface where hydrocarbons are trapped.

residual value The predicted value of a vehicle at the end of a lease term.

rewind To sell a new car to a customer who has just unwound from an earlier purchase.

roadside assistance A form of warranty that provides service in case of car-related emergency or inconvenience such as a flat tire, running out of gas, or locking your keys in your car.

routine maintenance schedule A schedule, specified by the manufacturer, of maintenance such as oil changes that will help keep a car running well and prevent breakdowns.

rust and corrosion warranty A warranty that covers problems with the sheet metal caused by rust eating through the metal.

security deposit A sum of money paid at the beginning of a lease term to offset any excessive wear and tear at the end of the lease, but refunded if the car is returned in good condition; also called a reconditioning reserve.

sedan A closed-roof passenger car with four doors and a trunk for carrying cargo, or a similar two-door car with at least 33 cubic feet of rear interior space.

service contract A type of warranty that covers service to a vehicle, sometimes offered by a manufacturer or an independent company; also called an extended warranty.

service station A site where consumers can purchase gasoline or diesel fuel and get simple repairs, often with an attached convenience store.

spare tire An extra tire provided by the manufacturer for use in case one of a vehicle's tires goes flat or is damaged.

sport utility vehicle (SUV) A vehicle that carries passengers and has an enclosed cargo area, larger and taller than a station wagon, often with four-wheel drive.

sticker price Manufacturer's suggested retail price (MSRP).

straight sale dealership An auto dealership whose sales strategy involves the salesperson developing a rapport with the customer and staying with the customer through the purchase.

Strategic Petroleum Reserve (SPR) The nation's emergency supply of crude oil that can be used to offset a severe oil supply shortage.

subsidized lease A lease in which the manufacturer covers some costs in order to provide low lease terms that will attract customers.

technical service bulletin (TSB) A notice given from manufacturers to dealers to inform them of repairs suggested to solve common complaints.

term depreciation Represents the depreciation in value of a vehicle over the term of a lease, calculated by subtracting the residual value from the capitalized cost.

title The written proof that a person or entity owns a vehicle.

total base number (TBN) A measure of the ability of an oil to neutralize the acids that enter an engine's crankcase as by-products of combustion.

total MSRP The suggested retail price of a vehicle with options added either by the dealer or at a customer's request.

trade-in A used vehicle that a customer sells to a dealer in order to provide funds to use toward the purchase of a new vehicle.

trade-in value The amount that a dealer will pay a customer for a used vehicle that the customer wants to sell in order to buy a new car.

turnover house An auto dealership in which salespeople use a turnover strategy, passing a customer off to another salesperson if the customer is not showing buying signals.

unwind Let a customer return a car that they have purchased; an extremely rare occurrence.

up The next customer who walks onto the lot.

up-front costs Costs that must be paid at the beginning of a lease, such as the security deposit, capitalized cost reduction, taxes, and registration.

up-sell An effort by an auto salesperson to sell a customer a more expensive car than they originally intended to buy.

upside down A condition in which a borrower owes more on a vehicle loan than the vehicle is worth.

used vehicle Any car that has been purchased by a customer and is being resold; also pre-owned vehicle.

vapor recovery system A system of valves, tubes, and gaskets on fuel pumps that prevents harmful gasses from being released into the air when gasoline is pumped into vehicles.

vehicle identification number (VIN) A unique number assigned to every vehicle produced or sold in the United States that allows the vehicle to be traced and its history to be tracked.

viscosity A measure of an oil's ability to flow at certain temperatures.

voucher A slip of paper that lets a salesperson known how much commission they made on a sale.

wagon A four-door passenger vehicle with passenger space in the front and a cargo area in the back instead of a trunk, smaller than an SUV.

wear and tear The normal wear that occurs in a vehicle during regular driving over a given period of time.

well A site where a tube has been drilled into the earth through which oil or gas is extracted.

wrap-around warranty A warranty that extends coverage beyond the standard warranty offered by the manufacturer.