Car Business Language & Lingo-Conclusion
“The Finance Departments Language & Lingo”
When it comes to Car Business Language & Lingo terms and jargon, the finance manager and sales managers have a couple of terms that they like to throw around. Sure, they use all the other terms that we already talked about, but they have a couple of terms that are more directly related to the specifics of working a deal. The first term is called…
- “Leg”—When it comes to “Leg” the more the merrier for the finance manager. If a deal comes back to the finance office without any “Leg” then the finance manager will not be a happy camper. For most finance managers, their performance can be directly related to how much “Leg” they consistently get or can create. Or in other words, their paychecks can be directly related to how much “Leg” they get per deal. So what exactly is “Leg” you ask?
“Leg” can be defined as a quoted payment that is inflated. For instance, let’s say that a customer made a purchase of a new vehicle. Their total amount financed is a flat $15,000 which represents tax, title, fees minus their down payment. If their interest rate is 6.9% at 60 months—financing $15,000, the payment would be $296.31. However, when the salesperson worked the deal, he told the customer that their payment would be $325.00 a month.
That would be a “Leg” of $29.00. So why is that so important and why would the finance managers paycheck be bigger? The finance manager makes money on selling things like extended warranties, gap insurance, and other products. If the customer thought that their payment was going to be $325 a month the finance manager would have a “Leg Up” on selling their products.
In other words, the finance manager could sell $1,500 worth of products and keep the payment exactly the same. They could sell $2,000 worth of products and the customer’s payment would only go up $10.00 a month. The finance manager could tell the customer that for a 5 year 100,000 mile warranty and Gap Insurance their payment is only going up $10.00 a month. For the customer that’s a no-brainer being able to get a 100,000 mile warranty and Gap Insurance for only $10.00 a month more.
The long and the short of having “Leg” is that it gives the finance manager a “Leg Up” when selling their products. If the deal came back with enough “Leg” the finance manager could sell $4,000 or more of products and not even get to the quoted payment from the salesperson. It makes selling finance products really easy. The next term used is…
- “Juice”—When it comes to “Juice” where not talking about “Orange Juice” here. “Juice” is also a payment that has “Leg.” You could hear a conversation such as this in a finance manager’s office…
“Does that deal have any “Juice” in it Scott?” Scott might say, “Yeah, Tom. It’s “Juiced” $50.00. You should make a home run on that deal.”
The next term could also be used in the finance office or on the sales floor. It has nothing to do with a Big Mac although it might sound like it has something to do with a hamburger. The next term is…
“A Quarter Pounder With Cheese????”
- “Pounder”—When it comes to “Pounders” the more the “Pounder” the more the money. “Pounders” typically are more closely related to even numbers of $1,000 denominations. In other words there are One “Pounders” Two “Pounders” Three “Pounders” Four “Pounders” and so on. A Four “Pounder” would mean that the dealership made $4,000 in gross profit.
So the next time you’re in a car dealership and you hear a couple of salespeople talking, and one says to the other…”You should have seen that last deal Scott. It was Seven “Pounds.” That means the salesperson is bragging about a $7,000 gross profit deal he made.
The last term (actually there are more, but I think it’s time I wrap this series up), is also a term that can be used in the finance office and on the sales floor. It’s typically used more on the sales floor though. It’s called…
- “T.O.”—First of all “T.O.” stands for “Turn Over.” It means to “Turn Over” information or “Turn Over” a customer (“Up”) to another salesperson or a manager. If a salesperson can’t close a deal, they’ll get a “T.O.” to see if their manager or another salesperson can close the deal.
A “T.O.” is an old sales ploy to get another face in front of the customer to see if someone else can close the deal. In many situations, the “T.O.” man will close the deal. Typically they are an experienced closer or the “Go to Guy.” The concept is to get another face or an authority figure in front of the customer to close the deal. In many cases it works, that’s why car dealerships insist on “T.O.s” with every customer that the salesperson can’t close which is usually 80%.
So there you have it…Car Business Language and Lingo. The next time you’re in a car dealership see how many times you hear some of these terms. You might want to even use some on your salesperson. It will let them know that you know a thing or two of what’s going on which will work in your favor.
Stay tuned for my epilogue, where I’ll make an attempt to use all the terms and jargon in one or two paragraphs. This might take a day or two so be a little patient.