Understanding these simple auto dealer related terms will help you understand the dealer�s salerep working with you on your next new car. These simple terms will assist you when hashing out a car purchase agreement!

Sticker Price (List Price). Sticker Price or List Price is the recommended selling price for a vehicle and each of its optional accessories as defined by the manufacturer. This is the advertised price of an automobile. Usually attached to a side window or to the car's windshield, this amount is either the manufacturer's suggested retail price (MSRP), or the advertised rate of the automobile. In either case, the �Sticker Price� is the asking price for the automobile. It is from this price that you begin to negotiate a better deal.

Invoice Price. The manufacturer's initial charge to the dealer including freight, destination, or delivery charges. This price may not reflect the dealer's final cost due to rebates, allowances, discounts, and incentive awards the dealer may receive. To give you the negotiating advantage when buying a new auto, do your research. Find out the invoice price, and try to negotiate a purchase price that's close to the invoice price.

Annual percentage rate. The annual cost of a loan to a borrower. Like an interest rate, the APR is expressed as a percentage of the loan amount. Unlike an interest rate, however, it includes other charges or fees to reflect the total cost of the loan. The Federal Truth in Lending Act requires that every consumer loan agreement disclose the APR in large, bold print. Since all lenders must follow the same rules to ensure the accuracy of the APR, borrowers can use the APR as a good basis for comparing the cost of loans.

Rebate. An incentive paid by the manufacturer to the customer as a way to increase sales of products. For example, slow-selling vehicles or previous-year models still in the dealer's inventory may feature this type of incentive to sell faster than they have been. Typically a rebate can be applied to the cost of the vehicle or received in cash by the customer. Instead of the rebate, the buyer is often offered special dealer financing. Often, taking the rebate is the better deal.

Dealer financing. Dealers have national lenders who determine the interest rate based on the credit rating of the purchaser. The dealership may offer you a choice between a cash-back rebate from the manufacturer and low-rate financing -- typically a loan with zero-percent APR.