"He who controls the language rules the world."

This quote is attributed to various people, but it undeniably represents a powerful idea for anyone in business, including auto dealers. Critics of the automobile industry foster distrust in the marketplace by utilizing words that mock the industry.

Controlling terminology in marketing and sales is crucial to maximizing marketing effectiveness, as it directly impacts compliance, thereby reducing legal risk; accuracy; customer understanding; brand consistency; and overall trust by ensuring a unified message across all communication channels. Conversely, inconsistent terminology can confuse customers, damage credibility, and hinder sales efforts. 

Lack of clarity in transactions is a major issue in complaints and lawsuits against dealers. Improved diction and word choice can alleviate many of these issues. 

I was reminded of this contemplative issue at several recent conferences I attended, principally the NADA convention, where dealer terms were being carelessly used.

Kickbacks, Flats and the Reserve

Arranging credit is a service provided by dealers, and receiving payment for this service is legal and honorable. The distinction between the buy rate and the sell rate is no different than the difference between retail and wholesale. Terms such as retail margin would be preferable. 

Add-On Products, After-Market Products, and Soft Adds

NADA has attempted to remedy this problem by encouraging dealers to utilize the phrase “voluntary protection products.” This term is superior, as it implies that consumers initiated the sale and the product provided a prophylactic result. “Ancillary products” or “optional products” are also preferable terms. In particular, the term “service contract” should be used versus the inaccurate “extended warranty.”

Car Deal

Although the term car dealer doesn’t seem to have a derogatory inference, the same doesn’t seem to be true for the term “car deal” or the “deal.” There are many alternatives that could be used to provide dignity to the interaction between dealer and consumer, such as transaction, bargain, sale or negotiation. Employing terms such as vehicle retailer or car store may also assist in professionalizing the industry in certain circumstances. 

Combating Auto Retail Scams Rule (CARS Rule)

An excellent example of the parodying of dealers is the name used by the Federal Trade Commission for this now-vacated proposal. NADA advocates for the use of Vehicle Shopping Rule, or VSR in lieu of this term. Why do people in the industry call it by this disagreeable name? 

‘Doc’ Fees

These fees may be the most objectionable from the public’s perspective. Calling them “doc fees” as opposed to the full name of documentary fee or administrative fee adds to this perspective that customers are being exploited. 

Yo-Yo Deals – Spot delivery

Spot delivery is an acceptable way to transact business with a vehicle customer. However, the term “yo-yo deal” is increasingly used, even in trade publications, to describe a spot delivery as though all not completely finalized transactions are employed to reel a consumer back for financial exploitation. 

The Box

No one wants to enter a box to transact business. Dealers should refer to it as simply the office. 

Car Loan

Dealers do not provide car loans; that is the purview of financing sources. Dealers do take on the role of creditor by offering retail installment sale contracts, creatures of state law.

General Dealer Jargon 

Dealer personnel should strive to be professional by avoiding use of jargon, which adds to the perspective that salespeople are disreputable. Examples include “upside down” or “in the bucket.”  Instead explaining that a consumer’s trade-in has negative equity provides clarity and respectability to the discussion. 

Acronyms and Initialisms in General

Customers should understand what dealers are saying. Using verbal shorthand should be avoided, as it may lead to distrust. 

Stealerships

National Public Radio published an editorial a few years ago alluding to dealerships as “stealerships,” obviously an insulting term. The full title of the editorial was “Inside the rise of 'stealerships' and the shady economics of car buying. [sic].” Dealerships add to this quandary by using impolitic, vexatious and imprudent language. Reform in this mode of expression is highly recommended. 

Terry O’Loughlin is director of compliance for Reynolds and Reynolds and is admitted to the Pennsylvania and Florida bars. Before joining Reynolds, he was employed by the Florida Office of the Attorney General, where he investigated automobile dealers and financing sources. He previously was a public accountant.