June 16, 2024

Thrive Insider

Exclusive stories of successful entrepreneurs

A Look at Terminology to Know Before Buying a New Car

A Look at Terminology to Know Before Buying a New Car

Are you in the market for a new vehicle, but you’re struggling to understand all the car buying terms like MPG and APR? Buying a new car can be difficult if there’s a lack of understanding when it comes to automotive terminology. However, you shouldn’t let that stop you from finding the new car of your dreams. Here are a few car buying terms explained so that you can get started on the car buying journey with more confidence and control.

What is MSRP?

This term is an acronym that stands for Manufacturer’s Suggested Retail Price. When a car arrives to the lot, it has a base value and that base value is like the initial reference for how much the vehicle is worth. The MSRP might not be the final price that you pay, but it’s helpful in determining how much you can afford, especially when comparing different vehicles that’ve sparked your interest.

What is MPG?

Here’s another acronym; it stands for Miles Per Gallon. It’s an estimate of how far this particular vehicle can travel on a single gallon of gas. Learning about a vehicle’s fuel economy is a great way to determine if it’s right for your needs. Sometimes, MPG is broken down into city driving and highway driving because the vehicle performs differently in these conditions.

What is Horsepower?

Horsepower is a popular car buying term that you’ll hear during the car buying process. It relates to the performance capabilities of a vehicle. Horsepower is a rate of measure. It tells you how powerful the engine is and how fast it can accelerate. A high horsepower rating means a vehicle can quickly accelerate from a stop, tow heavy cargo, and deliver a more spirited driving experience.

Understanding Electrics and Hybrids

Electric vehicles(EVs) and hybrids – these terms can get confusing, especially if you’re a first time buyer. An EV is a vehicle that uses electric motors instead of an internal combustion engine(ICE). Power comes from a battery bank instead of gasoline. A hybrid is a vehicle that uses a combination of electric power and gasoline. It’s a great choice if you want a more flexible choice when it comes to fuel economy.

What is APR?

Once you find a vehicle that suits your lifestyle and needs, it’s time to talk finance. Unless you’re paying cash for your new vehicle, you’ll most-likely want to finance your purchase with a car loan. The term APR means Annual Percentage Rate. It includes your interest rate and any other pre-paid finance charges to give you the total cost of borrowing for the purchase of your vehicle.

When in doubt, you can always ask the sales associates at the dealership to provide more information about any car buying terms that you don’t understand. Most sales associates are trained to simplify complex terms so that you fully understand the car buying experience. Now that you’ve learned more about car buying terms, you can continue shopping for a new car with added confidence. Moreover, leverage online resources or consumer guides to further educate yourself on specific car buying terms and industry jargon, empowering you to make informed decisions and negotiate effectively during the car purchasing process.