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Decoding car-dealer language

If you’ve ever bought a car, you know that dealers tend to speak a language all their own. We’ve translated that dealer-speak into everyday language so your next car-buying experience can be a little bit easier.

Dealer and woman customer

Car dealers talk a good game, and selling you big-ticket models is how they make their living. Sometimes, the words they use help them slide things by you that up your cost, so it’s important to understand what they’re saying. Here are some of the most common dealer terms — decoded.

Extended service contract

Anytime you buy a car, the dealer tries to push an extended service warranty on you. This package is basically an extension of the manufacturer’s warranty, but it’s riddled with loopholes and deductibles, making it highly unlikely that you’ll ever make your money back from it.

Mike Rabkin, president of From Car to Finish, advises buyers to avoid extended service contracts.

“It’s usually not worth your while costwise, unless you buy a horribly unreliable vehicle — which can be avoided with diligent research beforehand,” he says.

Appearance package

An appearance package is something you’ll usually find on the price breakdown of a new car. It includes nonpermanent items that dealers add to a car to improve its appearance. These include mats, splash guards, trims and moldings. According to Rabkin, these items are often very overpriced when they come from dealers.

“Appearance packages may sometimes be removed or included free of charge as a negotiating tool. They are a way to pad the dealer’s profit margins,” he said.

Extra fees

Your vehicle’s price breakdown likely includes a handful of fees that, to the average buyer, seem legit (although annoying). According to Rabkin, most of those fees are actually imposed at the discretion of the dealer. Things like dealer handling fees, dealer services fees, document fees and processing fees are not mandatory.

Rabkin says these fees “can vary greatly around the country, from tens to many hundreds of dollars.”

He adds that these fees may be negotiable when you’re determining the final price of your new ride.

Monthly payment

You know what a monthly payment is, but do you know why car dealers care about it so much? According to LeeAnn Shattuck, Chief Car Chick at Women’s Automotive Solutions, dealers may be up to no good when they ask about your ideal monthly payment.

“Dealers can easily play with different financing terms to get you the monthly payment you want without discussing the actual selling price of the car,” says Shattuck. “You should do the math ahead of time and know how much car you can afford based the monthly payment you want, current interest rates and a reasonable loan term.”

Lease overage charges

Leasing a vehicle is an easy way to get into a vehicle you couldn’t otherwise afford, but not every driver is a good candidate for a lease. If you drive more than 12,000 miles in a year, you’ll likely owe tons of money in overage charges once the lease is up, wiping out any savings you’ve netted from the lease.

“Be sure you fully understand the pros, cons and fine print of a lease before you get locked into one,” says Shattuck. “If you don’t, you could end up owing thousands of dollars when the lease comes due!”

More car tips from SheKnows

Understanding how “lemon laws” protect your purchase
How to get the most out of a test-drive

10 Things to consider when buying a new car

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