Glossary

Dealership terms, explained

Plain-language definitions of the terms used across the dealership world, from consignment and reconditioning to floor plan and bill of sale.

B

Paperwork

Bill of Sale

The legal document that records the transfer of a vehicle from seller to buyer, listing the parties, the vehicle, the price, and the terms of the sale.

C

Consignment

A selling arrangement where a vehicle owner keeps title while a dealership markets and sells the car on their behalf, taking a fee or margin at closing instead of buying the car outright.

Compliance

Curbstoning

The illegal practice of selling vehicles for profit while posing as a private seller to avoid dealer licensing, disclosure, and tax obligations.

D

Inventory

Days in Inventory

The number of days a vehicle has sat unsold on a dealer's lot, a core metric for turn rate, aging, and holding cost.

F

Finance

Floor Plan Financing

A revolving line of credit a dealership uses to finance its inventory, paying interest per vehicle until each car sells and the advance is repaid.

L

Finance

Lien

A legal claim registered against a vehicle by a lender or creditor, which must be cleared before clean title can pass to a buyer.

O

Compliance

OMVIC

The Ontario Motor Vehicle Industry Council, the regulator that licenses and oversees motor vehicle dealers and salespeople in Ontario.

R

Operations

Reconditioning

The process of getting a newly acquired vehicle retail-ready, covering mechanical repairs, safety work, detailing, and cosmetic fixes before it goes on the lot.

S

Compliance

Safety Standards Certificate

An official document certifying that a vehicle met minimum safety standards at the time of inspection, required to register many used vehicles for road use.

T

Sales

Trade-in

A vehicle a customer gives the dealer as part of the payment for another car, with its appraised value credited against the new purchase.

V

Vehicles

VIN

The Vehicle Identification Number, a unique 17-character code that identifies a specific vehicle and encodes details like make, model year, and place of manufacture.

W

Sales

Wholesale vs Retail

Two price points for the same vehicle: wholesale is the trade or auction value between dealers, while retail is the higher price a consumer pays on the lot.