Buying a new or used car often comes hand in hand with deciphering car jargon or car buying terms. Terminology used when discussing cars is no doubt somewhat confusing. Without fully understanding the language used, you are likely to become confused, which might slow down the process.
This doesn’t necessarily mean you need to become an expert in the industry, but understanding common phrases will likely help you make your purchase with less hassle.
To give you a head start, we’ve listed common phases and car buying terms below which we think will benefit you:
| Jargon | What it means |
| On-road costs | On-road costs include vehicle preparation, registration, compulsory third insurance and stamp duty |
| Manufacturer's List Price (MLP) | The basic price of the car. This excludes on road costs |
| Drive-away price | The drive-away price is the only price you should be interested in - it is the MLP plus all on-road costs |
| Changeover price |
The difference between the trade-in price that will be paid on your present vehicle and the drive-away price for your new car |
| Build date | The month and year the vehicle was built. It's usually stamped on the build plate, which is usually in a rear corner of the engine compartment. This is used to establish the age of the car for the purposes of a used-car valuation |
| Compliance date | The month and year that the vehicle was certified as complying with Australian Design Rules - usually is a few months after the build date |
| Model year | Manufacturers increasingly assign a model year to a certain specification - for example, an MY17 (model year 2017) car might have different features to a MY16. However, a MY17 model can be built in 2016 and is still considered a 2016 model which will impact your resale value |
| Manufacturer's warranty | The factory warranty (anywhere from three to seven years, depending on the brand) and a fixed or unlimited number of kilometres. This is the car's official warranty and does not come with any obligation to return to a dealership for servicing. However, it must be noted that if you don't get your car serviced at a dealership and they don't use genuine parts then you may not be covered if that part fails |
| Dealer warranty | A dealer warranty might specify that you must return to the dealership for servicing to maintain cover and, rather than providing useful extra protection, can be a means of tying you to more expensive servicing. |
| Extended warranty |
An extended warranty can be a plus, but this depends on whether it's a factory warranty or a dealer warranty. A factory warranty is great. A dealer warranty might not be worthwhile for the reason described above. |
| Car Loan | If the buyer does not have enough cash to purchase the car outright, the buyer will need to borrow money in the form of a car loan. This is a sum of money transferred to the buyer, from a lender, to be re-payed with interest. |
| Credit History | A financial record which allows lenders to define your ability to repay a loan. |
| Buydown | A financing term relating to an upfront payment to decrease the interest rate. |
A car loan from the NRMA will offer competitive rates and Member Benefits. Find out more information.
